Maine will pay college graduates to stay
Law allots tax credits to help cover loans
Maine Governor John E. Baldacci will sign a law today that will provide tax credits to help cover the cost of college loan payments for students who earn degrees in Maine and remain in the state.
Activists say the multimillion-dollar program, passed unanimously last month by Maine's House of Representatives and with little opposition in the Senate, is the first of its kind in the nation. They also said it is only the sixth time in the state's history that an initiative introduced by a citizens' group had been passed by the Legislature.
"I believe in this legislation, and I know that it is the key to opening up opportunity for Maine's students," Baldacci said in a statement. " This is about our generation helping the next one. We're telling our students: If you live, work, and pay taxes in Maine, you're not going to have this student debt hanging around your neck."
The program helps reimburse loans for any resident who earns an associate's or bachelor's degree in Maine and then lives, works, and pays taxes in the state. It also allows employers to make the loan payments and claim the credit.
The tax credits would amount to a maximum of $2,100 per year, or $8,400 total, for a graduate who spent four years at a Maine college.
Over the past year, the activists who support the program collected 73,000 signatures, enough to send the proposal to voters as a referendum in November. But the Legislature bypassed the referendum process and passed the bill in the final days of its 2007 session.
Maine needs the program because more than 50 percent of the nearly 7,000 students who earn associate's or bachelor's degrees there every year leave the state for an extended period, according to Opportunity Maine , the group that launched the initiative.
Many students who earn bachelor's degrees leave the state because they graduate with an average $22,301 in loans, said Andrew Bossie , president of Opportunity Maine.
"We're trying to combat the high cost of student education and student loans," Bossie said. "On top of that, we're trying to address the economic problems of the state. We have a lower income and fewer degree holders than any other New England state."
Maine's House voted 142-to-0 for the measure and its Senate voted 27-to-8 in favor. Those who voted against the bill, all Republicans, cited future costs.
Over the next two years, the program -- which is not retroactive and takes effect in January -- will cost the state's 1.3 million residents an estimated $150,000. But within 10 years, the cost is estimated to exceed $50 million.
Senator Richard Nass , a Republican who is a member of the Joint Standing Committee on Taxation, said he voted against the bill because the state has higher priorities.
"As I look at the state's financial situation, here we are now obligating ourselves to college students at a time when the poorest of the poor are getting kicked off Medicaid," he said. "It was ludicrous to be paying off college loans at the same time we're in trouble with Medicaid."
He added: "I don't share some folks' concern for college students. Many of them are talented and fortunate. They are acquiring for their own benefit, and all of us, the potential to earn a lot of money. They will be able to easily pay off their loans. I don't think we need to provide them money from our treasury."
Supporters of the measure said it would pay for itself. They cited studies that show the program would benefit the state by about $15 million by 2018.
Senator Ethan Strimling , a Portland Democrat, said the program is a good investment
"Maine is losing a lot of young people, and this is a great opportunity to build long-term economic sustainability and keep young minds here," he said. "It hurts our economy in the long term when we loose so many young minds who could be vitalizing our community. This could help stem that tide."
David Abel can be reached at dabel@globe.com. 