A new bill in Maine is aimed at creating an ambitious student-loan forgiveness program. If someone lives and works in Maine for five years, the state could relieve all their student debt.
State Senate Majority Leader Nate Libby recently co-filed Maine Senate Bill 149, which calls for a bond to fund the new program.
“The concept that I’ve come up with is having our state create a first-in-the-nation student-debt forgiveness benefit to help attract and retain young workers,” Libby said.
He says the program addresses the workforce shortage and the aging population in Maine. He originally introduced the same bill in the last legislative session, where it died on the Senate floor in September. While former Gov. Paul LePage supported the legislation, the Legislature didn’t put the bond on the November ballot.
Libby explained why he is pushing for a $250 million bond rather than a tax credit.
“With a program like this, we have limits, so I suggested $250 million,” he said. “It’s not like setting up this program would open a floodgate where the state would have to pay off more than $250 million, if that’s what the voters support. So in that sense it’s capped.”
There is no limit, however, on the number of people who can claim a tax credit.
Maine currently offers several student-loan tax breaks, allowing taxpayers to offset their tax burden by the amount paid to student loans. But Libby said these tax credits are difficult to access.
“The problem that I see is that the tax credit’s far too complicated for most lay people to figure out how to file for,” he said. “It’s an enormous amount of paperwork and calculations.”
A public hearing for the bill has not yet been scheduled, but it is expected to take place some time in February.