The Educational Opportunity Tax Credit reimburses Maine college graduates for student loan payments they make during years that they live and work in Maine. Two bills plan to make that credit stronger.
“Taken together, these two bills will change the make-up of our workforce and prepare Maine for a brighter economic future with more high-wage, high growth jobs,” said, Rep. Gary Knight sponsor of the two bills and House Chair of the Taxation Committee.
The tax credit lowers financial barriers to college, because students know if they have to take on debt to pay for college, they will be able to manage it. Alternatively, employers can implement loan reimbursement programs as an employee benefit, make loan payments on employees’ behalf, and claim the credit.
The two new bills are:
LD 835, An Act To Strengthen Maine’s Economy through Improvements to the Educational Opportunity Tax Credit, will make the EOTC refundable, allowing a full reimbursement for education loan payments for college graduates who live and work in Maine.
LD 1174, An Act To Help Maine’s Employers To Recruit Skilled Workers by Expanding the Availability of the Educational Opportunity Tax Credit, will extend the EOTC to those who earn their associate or bachelor’s degree out of state.
“Making the Educational Opportunity Tax Credit refundable will help more Mainers afford their college loans and help them stay in Maine to live and work,” said Rob Brown, Co-Director of Opportunity Maine. “Allowing the Credit to apply to Mainers who went to college out of state will bring more educated, skilled workers back into Maine and create the workforce our businesses need to grow. Without an educated, skilled workforce, Maine will never have a critical mass of good jobs.”
Research shows that 90% of high-growth, high-wage jobs created over the next decade will require education beyond a high school diploma, roughly half those jobs will require an associate’s degree and nearly 40% will require a Bachelor’s degree or higher. However, Maine has the lowest education levels and the lowest incomes in New England and, nationally, we have the oldest workforce, the highest percentage of 18 – 24 year olds who are neither working nor pursuing education, the third highest student debt loads, and one of the lowest percentages of adults pursuing any form of post-secondary education.
“With Tax Day approaching, lots of recent graduates have called us, thanking us for the help that the Opportunity Maine Program gives them in paying their student loans,” said Opportunity Maine’s Rob Brown. “Unfortunately, many recent graduates don’t earn enough to take full advantage of the Program. Making the credit refundable will ensure all degree earners can take full advantage of the benefit.”
Additionally, expanding eligibility of the EOTC to those who earn their degree out of state as well as in state will create a powerful incentive for college graduates to move to Maine to start their careers, businesses and families, and for Maine businesses to recruit educated, skilled employees from outside of Maine.
As one example, Wright Express recently had to divert a major expansion to Massachusetts because they could not recruit the talent they needed from within the state. As CEO Michael Dubyak said in the Portland Press Herald, “Instead of growing jobs in Maine… we now look to Massachusetts and New Hampshire to fill our talent needs. Our preference is to bring jobs to Maine so we can have control of our operations, but the reality may force us to divert more jobs to our other operations.”
Rep. Phil Curtis, House Republican Leader and cosponsor of the two bills, said, “The Opportunity Maine Program is an investment in Maine’s workforce that I know will provide Maine’s businesses the skilled workforce they need to grow.”
Opportunity Maine is the citizen led initiative that gathered enough momentum to put their proposal forward in the legislature. That led to the Educational Opportunity tax credit. Read more about: Opportunity Maine