January 10, 2022 In July of 2021, Maine announced that it would be formally study the burden of student debt on its graduates. The state, which has the sixth-highest student loan average nationwide, reinstated Maine’s Commission to Study College Affordability and College Completion. Just this November, the Commission officially held their first meeting, comprised of legislators, educators, college representatives, and other stakeholders. […]
January 10, 2022
In July of 2021, Maine announced that it would be formally study the burden of student debt on its graduates. The state, which has the sixth-highest student loan average nationwide, reinstated Maine’s Commission to Study College Affordability and College Completion.
Just this November, the Commission officially held their first meeting, comprised of legislators, educators, college representatives, and other stakeholders. Together, they assessed the state’s student debt crisis to suggest viable solutions. This effort aims to provide relief to indebted students, many of whom have experienced significant financial trials due to the outstanding loans and the COVID-19 pandemic.
A history of debt among students—
Across the United States, student debt totals $1.7 trillion — a sum higher than the national credit card debt. In Maine, the state’s nationwide student debt ranking has increased over the last three years. From the eighth spot in 2019, new reports show that Maine has jumped to sixth with an average student debt of $33,000. Policy analysts partly credit this to several state funding cuts that began in the 1980s. This lack of government support comes despite decades of Maine’s students recording some of the highest rates in community building participation. This includes spearheading Opportunity Maine, which aims to provide tax credit for graduates of Maine colleges who choose to work and reside in the state. While this has helped some, the continued downward trend of government funding has forced thousands to turn to costly student loans to cover costs.
Growth in student loans across Maine disproportionately affects lower-income students who are more likely to get higher interest rates. According to studies, 10 percent of all Mainers end up defaulting on their student loans. Following the COVID-19 pandemic, already financially strained graduates have been left to wonder how to pay for their loans and whether they’re eligible for federal relief measures. Currently, one in five Mainers with student debt have had their wages, income tax refund, or social security check garnished to pay for existing loans.
Over the years, there have been initiatives by both private and government bodies in the hopes of improving student loan burdens.
Across the country, around 17 percent of employers offer student debt assistance, according to a 2020 survey. Nvidia, the California-based tech company, offers employees student loan reimbursements of up to $6,000 yearly. Another student debt solution from the private sector involves the tech industry streamlining education. Global giants like Amazon and Google offer free upskilling courses among employees to eliminate the need for student loans. Amazon recently pledged $700 million towards its Upskilling 2025 program. By adopting the university model, tech companies are hoping to bridge the skills gap and deter accumulating debt.
Maine’s university system has been freezing tuitions and increasing grants and scholarships.
One grant, that would drastically improve the student debt burden if it were to be boosted, is the State of Maine Grant program. But currently it is only afforded to those with special personal circumstances. If its scope were to be expanded, the number of those applying for student loans will conversely decrease. Some lawmakers have also weighed the potential of forgiving small student debts.
PEW research shows that borrowers who owe less than $10,000, and may not have completed their programs of study, default at higher rates than those with larger balances. Millions of people, including Mainers, still are awaiting President Joe Biden’s promise to forgive at least $10,000 in student debt per person. In Maine, this equates to one-third of borrowers. Understanding that the President has only been in office for 11 months his pledge remains unfulfilled. However, he has focused on pre-existing forgiveness programs. This includes a pandemic pause on federal loan payments, which will lift in February 2022.
The future of higher education in Maine
Details of the Commission to Study College Affordability and College Completion’s preliminary hearing have yet to be shared. But by January 2022, the Commission is expected to report its findings back to the Maine Legislature. Among the known tasks that the Commission will undertake is studying the potential to open a no-cost community college. Though this may not necessarily address existing student debt, it may prevent the burden from passing onto the next generation. For those currently in debt, whether broad forgiveness will be implemented is yet to be determined.