Students push Legislature for debt relief

Students strapped for cash after graduation might find a solution from Minnesota âÄî unless the stateâÄôs budget problems get in the way first. Members of the Minnesota Public Interest Research Group are looking to gain support at the State Capitol for a program that would provide debt relief to students who continue to work in Minnesota following graduation. Like other spending, however, the poor economy could hinder its progress through the Legislature. The plan, called âÄúOpportunity Minnesota ,âÄù is directly based on a similar program in Maine, University of Minnesota senior Ryan Kennedy said. The program would provide a tax credit to reimburse students for their state or federal student loan payments âÄî as long as they live and work in Minnesota and graduated from a school in the state. âÄúItâÄôs basically an economic stimulus plan,âÄù Kennedy, who also serves as statewide affordable higher education coordinator for MPIRG , said. Still, Legislature reaction has been predictable âÄî Kennedy said the handful of lawmakers he has met with have expressed concerns about any new spending in a session with an almost $5 billion deficit . âÄúThe program is a great idea, we just donâÄôt have any money,âÄù Rep. Gene Pelowski, DFL-Winona, said. âÄúThatâÄôs unfortunately going to be the theme of this session. Any new funding proposal is literally off the table.âÄù The idea is that students who work in the state following graduation would pay enough in taxes to make up for the money the state would reimburse for their loan payments. Proponents say the program would bolster the stateâÄôs workforce by keeping graduates in state and eventually become a new source of revenue for the state. âÄúThere is definitely some measureable advantage to this,âÄù Kennedy said. In Maine, the state legislature passed a copy of the proposal, called âÄúOpportunity Maine ,âÄù in 2007. Rob Brown , executive director of Opportunity Maine, said the taxes paid by program participants will eventually become a source of nearly $20 million in extra revenue for the state once the costs plateau in 2018, 10 years after the program began. âÄúItâÄôs a way for the state to say, âÄòwe value you as a college graduate working in our workface so much that we would rather you dedicate your money to paying down your student loans than paying income taxes,âÄôâÄù he said. In Maine, the program is expected to cost more than $55 million annually , though costs would be much higher in Minnesota, Elton Mykerezi , University assistant professor of applied economics, said. Mykerezi, who is working on an economic analysis for Opportunity Minnesota, said costs would be higher because more students would be eligible to utilize the program. For example, more than 14,000 Maine residents graduated from high school in 2005, making them eligible for the program if they went to college in state, according to Opportunity Maine. The Minnesota Office of Higher Education projects that more than 64,000 Minnesotans will graduate this year. Mykerezi said he hasnâÄôt put an exact cost on Opportunity Minnesota yet. âÄúThe truth is that education reform, especially if it has a good chance of working out, is always a desirable thing for legislators,âÄù Mykerezi said. âÄúIt might have a chance, if it shows to have promising long-term returns to an investment.âÄù Brown said he wouldnâÄôt recommend an initiative like Opportunity Maine to every state, but said itâÄôs something he would like to see the Minnesota Legislature at least consider. Kennedy said he plans on seeking support for the initiative from the Minnesota Student Association and the Student Senate, among other groups. âÄúWe need to look more into ways we can spend a little and get a lot,âÄù Kennedy, who is chair of the Student Senate, said.