College loan tax credit will pay for itself - Portland Press Herald

Keeping Maine's brightest youth here after graduating is among the best economic catalysts by Clifford Ginn, President, Opportunity Maine

A recent Press Herald editorial praised a group's efforts to create a scholarship fund for South Portland high school graduates. As president of Opportunity Maine, I, too, applaud these people for working to make college affordable. Expanding educational opportunity is the best way to bring more high- paying jobs to Maine.

What the editorial neglected to mention, however, is that Maine is now the nation's leader in making college affordable for its residents. Under a new law, Mainers who earn associate's or bachelor's degrees at Maine colleges (public or private) and live and work in Maine afterward can claim an income tax credit large enough to cover their student loan payments.

A graduate can also transfer this educational opportunity tax credit to an employer who makes loan payments on the graduate's behalf.

Opportunity Maine drafted this law last year as a citizens' initiative, gathered more than 72,000 signatures to place it on the ballot, and built a statewide coalition of hundreds of students, community members and business, labor, education and civic leaders. The Maine Legislature passed it as written (the sixth time in Maine history that the Legislature passed a citizens' initiative outright). The vote in the House of Representatives was unanimous!

The governor and legislative leaders of both parties have publicly committed to making this a long-term investment, without any scaling back, so Mainers enrolling in college can count on the credit being there.

Educational opportunity tax credits are capped based on tuition and fees at public colleges, and are tied to loans approved under a financial aid package. This translates into assistance for most students, and up to $55,000 for those least able to afford college.

Most Maine graduates leave college with education-loan debt. Debt loads average more than $21,000 for bachelor's degree earners and half of that for associate's degree earners. The extraordinary cost of college deters many Mainers from attending and drives many graduates out of the state because they cannot make loan payments on Maine salaries.

The educational tax credit makes it possible for Mainers to enroll in college with the confidence that they will be able to erase their educational debt, and makes it easier for graduates to live and work in Maine after earning their degrees.

This law will benefit Maine businesses. The education level of the work force is the most important consideration for businesses deciding where to locate, and making college affordable is the best way to get more degree holders in our work force.

Allowing Maine businesses to claim the credit on an employee's behalf will also give them an advantage over competitors in other states.

Investing in making college affordable is thus the best way to strengthen the state's economy. The proportion of degree holders in a state's work force is the main predictor of average incomes. This is unsurprising, as an associate's degree adds an average of $10,000 to a person's yearly earning power, and a bachelor's degree adds almost $17,000.

Maine's incomes lag 25 percent behind the rest of New England, and the proportion of degree holders in our work force lags 23 percent behind. Opening the doors of educational opportunity will allow us to catch up with the rest of New England on both fronts. The law will pay for itself.

The law provides benefits for anyone enrolled in college when it goes into effect, so current students and Mainers enrolling this fall and winter should check with their financial aid offices about how to become eligible.

Even with the educational opportunity tax credit, we still need more of the type of aid that the South Portland scholarship fund would provide.

Likewise, the state and our colleges must work together to finance needed improvements to our higher education system and to control tuition growth.

However, we have seen in the past year that when Mainers work together, we can meet any challenge and build a brighter future.