For decades, high school graduates have been caught between two relentless trends: At a time when a growing number of top-paying jobs require some form of post-secondary education, states have cut support for public universities.
As a result, students are paying more for their education, and many of those who graduate have debt levels that were unheard of a generation ago. Debt burdens affect the kinds of jobs young people can do, where they can afford to live, and even the most personal decisions about when to start a family. Making this debt load manageable would not only be a relief for the people who carry it, it would also help the state by putting debtors’ effort to more productive use in the economy.
The student debt challenge is forcing policy makers to look back at people who owe more than they can afford at the same time they look forward to ensure post-secondary education is debt-free. another generation with too much debt. Two proposals currently before the Legislative Assembly attempt to attack the problem from both ends and merit careful consideration by legislators.
The first is Governor Janet Mill’s budget proposal to make a one-time expenditure of surplus funds to help community college students earn a one-year certificate or two-year associate’s degree at no cost.
The other would also tap the surplus to relieve up to $40,000 of student debt for those eligible for a new homeowners mortgage program run by the Maine State Housing Authority.
Governor Mills’ community college proposal was a highlight of this month’s State of the State Address. Out-of-state students in the 2020-2023 high school graduating classes who enroll full-time in a community college may be eligible for the program. It is estimated that 8,000 students could be eligible, at a cost of $20 million. To be eligible, students should enroll full-time and earn 30 credits per year; qualify for in-state tuition or commit to living and working in Maine; and accept all federal and state grants, scholarships, and other sources of funding.
DL 1978 would spend $10 million to help people who are already in debt. People who buy a home through MaineHousing’s first-time homeowner program could get up to $40,000 in debt relief over five years. This would change their income-to-debt ratio, allowing buyers to take out a bigger mortgage. The program could bring back young Mainers who felt they needed to move to other states to earn enough money to repay their loans, and it could be an attractive sweetener for employers trying to recruit workers.
By design, people who received debt relief under this program would buy homes, work, and pay taxes, contributing to communities in ways that federal loan repayments would not.
Neither proposal is perfect, as they both propose spending one-time money to fix a problem that won’t go away. But that’s no reason to sit back and do nothing.
A pilot program could show the value of managing past debt and future costs by making higher education more accessible to Mainers. It could also give the state an advantage in national competition for workers.
The surplus gives state governments a chance to experiment. Maine policy makers should not miss the opportunity.