Mainers Give Grads Debt Relief

Andrew Bossie was tired of bad ballot referendums. After spending the fall of 2005 with Maine student activists and the League of Young Voters fighting a referendum that would have gutted an anti-discrimination bill written to protect Maine’s gay population, he decided to go on the offensive and use the same process to address the needs of Maine’s students.

“People were dropping out of school because they couldn’t afford it, people were leaving the state after graduation instead of contributing back and growing the economy,” he says. ​“It was a huge problem.” 

So the former University of Southern Maine student body president and his newly created political action committee, Opportunity Maine, developed a proposal that would ease some of the financial burden of going to college. Then, Bossie and 500 volunteers logged more than 12,000 hours canvassing on street corners in the brutal Maine winter to gather the 73,000 signatures needed to put their proposal on the ballot in the November 2007 election.

But a funny thing happened on the way to election day. Legislators grew so enamored with the bill that they pre-emptively passed it – only the sixth time in a century that Maine lawmakers enacted a citizen’s initiative without sending it to statewide referendum. So as of June 22, help is on the way for Maine students in the form of Opportunity Maine, an innovative local answer to the student debt crisis. 

Opportunity Maine authorizes tax credits to refund educational loan payments for any Mainer who earns an associate’s or bachelor’s degree in Maine and then proceeds to live, work and pay taxes in the Pine Tree State after graduation. While the amount available for the credit would be capped at the cost of tuition and fees for the University of Maine system or the Maine Community College system, students at costlier private colleges can also apply for the break. As it stands, a graduate with a bachelor’s degree can be reimbursed up to $2,100 per year for four years. And, in a coup for the business community, employers can agree to make the loan payment on behalf of hired students and then claim the tax credit themselves.

This particular bill is good for Mainers because the state’s economy is at a crossroads. The decline in quality manufacturing and natural resource-based jobs has caused average income to drop 30 percent below the New England average. Meanwhile, Maine has one of the highest high school graduation rates in the country, but only 57 percent of students pursue higher education, mainly because of financial constraints. And those who do graduate college leave school with an average debt of more than $21,000 (the seventh highest in the nation), a main reason why 53 percent of students leave Maine for higher compensation in places like Massachusetts.

While the state’s economy is on the ropes, all is not lost. According to ​“Charting Maine’s Future,” an October 2006 report by the Brookings Institution, the building blocks for a diverse and vibrant economy remain. For one, in the past seven years the state has witnessed a substantial population boom, jumping from 46^th to 26^th in the country in annualized growth rate. Maine also outperformed the nation in job creation during the last economic cycle and has seen growth (albeit humble) in high-tech industries like boat-building, advanced materials and biotechnology. But, the report warns, ​“Maine’s aging population includes too few young workers and too few highly skilled or educated people.” 

“There’s been a growing awareness of how important it is to have a highly educated population if you want to stimulate an economy and be competitive,” says Anya Kamenetz, author of Generation Debt. ​“And Maine is very aware that they have catching up to do.”

The bill’s major strength is its attractiveness to multiple constituents. It eases the increasing burden of college payment for students and their families. Businesses will grow more competitive with an influx of talented applicants. The state will benefit with an injection of new tax dollars and consumption. And proponents claim that financially, the proposal will break even or better by 2015, as the state generates more income as a result of higher income taxes and a stronger economy. ​“I think the essence of it appeals to a lot of people because it’s a really good idea and one that’s really needed,” says Brian Hiatt, communications director for the League of Young Voters.

Some critics contend that the law should also include Maine residents who attend out-of-state colleges but still want to move back home. Others question its focus on Maine at the expense of the national economy. But such dissenters are few and far between. Kamenetz says creating incentives for educational attainment could strike a chord with students rights’ activists nationwide. 

“While it’s a really isolated local effort, it does go farther than most of these national actions because you’re actually paying off people’s loans, you’re not just lowering the payment,” says Kamenetz. ​“If it does have an economic benefit for Maine, it has a chance to be a model for others.”