In August, President Clinton signed the massive new balanced budget agreement with $40 billion in education tax credits. Now the task its to help colleges, students and parents figure out their roles in the complex package.

The agreement includes a HOPE Scholarship with a full tax credit on the first $1,000 of tuition and a 50-percent credit on the next $1,000, for total aid of $1,500. The credit applies during a student's first two years in college. Smaller credits for upper-level study, tax deductions for student-loan interest and tax-free treatment of prepaid tuition programs are other elements of this package, estimated to cost about $40 billion.

Here is a look at key questions about HOPE's operation, based on the legislation and guidance from White House, congressional and association staff:

When does HOPE start?

The credit takes effect in tax year 1998 for education expenses paid after Jan. 1. However, families and/or students will not get the actual credits until they file 1998 tax returns, which are due April 15, 1999.

Who is eligible?

Single-parent families earning up to $40,000 a year and couplets earning up to $80,000 a would get the full HOPE credit. Families still would receive some help up to $50,000 a year for one-parent households and 5100,000 for two-parent households. Higher-earning families would receive no benefits.

What expenses are covered?

Mainly tuition and fees. Many lawmakers wanted to include books but failed to get such aid into the final agreement. At some lower-cost institutions, "tuition is low but books are expensive," said Ruth Flower, government relations director for the American Association of University Professors. In fact, books may equal or exceed tuition costs for students in states such as California.

What role will colleges have in the program?

To be determined, pending talks between the U.S. Education Department and the Treasury Department about paperwork requirements and other rules.