Maine Considers Student Loan Tax Credit Expansion
AUGUSTA, Maine (AP) — A measure moving forward in the Maine Legislature would provide tax credits for student loans to some who graduate from out-of-state colleges and return to Maine in a continued effort to encourage more young people to work and live in the state.
The Democratic-controlled House and Senate will soon consider for final passage the bill expanding the Educational Opportunity Tax Credit — which currently reimburses student loan payments for students who go to Maine community colleges and universities and stay in the state after graduation — aimed at stemming “brain drain” but underutilized by Maine graduates, supporters say.
Under the bill, students could qualify for the tax credit if they go to school in another New England state because the major they want to pursue isn’t offered in Maine, said its sponsor, Democratic Rep. Catherine Nadeau of Winslow. It’s targeted at students who participate in the New England Regional Student Program, which provides tuition discounts to students for out-of-state New England colleges and universities.
Rep. Justin Chenette, Maine’s youngest lawmaker and a co-sponsor of the measure, said he’d like to extend the tax credit to all out-of-state graduates, but that this is a good start.
“Ultimately every kid that leaves the state to go to school, we should be saying, ‘We want you to come back here, to apply the knowledge you’ve learned elsewhere,’ because that’s how we’re going to move our economy forward,” he said.
Advocates have criticized lawmakers for failing to fund a marketing initiative for the program, which has caused few students to take advantage of it. In 2012, 1,157 graduates received the credit, according to Maine Revenue Services, which is up from about 710 the year before but nowhere near the thousands of students that supporters had hoped would be using it.
Through the tax credit, a student who graduated from a state university, college or community college in 2013 and stayed in Maine can claim up to $4,272 per year to reduce the amount they owe the state in taxes. That can be a big weight off the shoulders of students who graduate with thousands of dollars in loans, supporters say.
The bill, which received unanimous support in the Taxation Committee, is expected to pass the full House and Senate but the biggest question will be whether it gets funded, Chenette said. It would cost the state about $228,000 over the next two fiscal years, according to the Office of Fiscal and Program Review. Nadeau said the actual amount would probably be much smaller than that.
Rob Brown, executive director of Opportunity Maine, a nonprofit that works on college affordability issues, said he supports the bill but the state still must implement a marketing effort to ensure the credit doesn’t continue to go overlooked.
“It’s hard to the gauge the effectiveness of the program until they … make people aware of the benefit they’re creating,” he said. “But hopefully we can get to that.”
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