Governor Blanchard of Michigan announced that the IRS planned to allow parents to participate in the state's prepaid-tuition program without paying additional federal income tax. A broader ruling will take additional time to formulate. The federal government is considering a national plan to allow tax breaks for college savings. (MLW)

Many people think of gifts to colleges and universities in pleasant terms, but sometimes things go wrong. When a donor's children sued Princeton University in 2002, development officers, college presidents, and trustees took note. Whoever is right and whoever prevails, the lawsuit illustrates that the feel-good images associated with major gifts…