On Dec. 17 of last year, Maine State Sen. Nate Libby of Androscoggin co-filed a bill along with Rep. Mattie Daughtry and several other senators that proposed a program aimed to forgive student loans for an individual who has lived and worked in Maine for five or more years.
Libby said that if the bill passes successfully, it will be going out to voters for approval at a referendum in the fall of 2019 or the summer of 2020. The ballot question, according to the bill’s legislative document, will be phrased: “Do you favor a $250,000,000 bond issue to provide funds for payment of student loan debt of individuals who agree to work and reside in Maine for five years and for reimbursement of employers that make student loan repayments on behalf of such individuals?”
University of Maine’s students and graduates could help decide whether this program is successful or not, Libby believes. He also believes that this bill could aid in student retention and draw more out of state students to attend UMaine.
Connie Smith, the director of Financial Aid and manager of Student Employment at UMaine, works frequently with students regarding grants, scholarships, loans, work-study, waivers and assistantships.
“I’m excited that through this proposal Maine is leading the nation in an effort to relieve student loan debt and at the same time assisting with workforce development by enticing students to live and work in Maine after graduation,” Smith said.
According to the 2017-2018 Common Data Set of UMaine, enrolled undergraduate students were awarded close to $39 million in need-based student loans last year.
“The bill calls for no maximum amount of benefit but I envision a cap of $10,000 per individual,” Libby said. “The bill makes no eligibility distinction between public and private loans, or type of degrees, or when degrees were earned.”
Libby says his inspiration for this bill came from what he believes to be two of the most pressing economic issues that threaten future growth in our state’s economy: Maine’s worsening workforce and labor shortage, and our growing student debt burden.
“Investing in recruiting and retaining workers through direct student debt forgiveness is my proposed solution to both economic crises,” Libby said.
Although this bill is aimed at workforce attraction or retention, Libby said it doesn’t necessarily get at other problems related to student debt, for example, “a student debtor’s bill of rights and unfair lending practices, or tackling the problem of high costs in higher education generally.”
The economy is already slowing due to workforce shortage, Libby believes. He says that in the future, a shrinking number of workers and consumers will lead to a shrinking state Gross Domestic Product. Libby wants to deal with these demographic hurdles and “work diligently at retaining young Maine workers and attracting new Maine workers.”
There is plenty left to be done before this bill will be sent to the voters for approval. Libby said there will first be a public hearing before the Legislature’s Committee on Innovation, Development, Economic Advancement and Business which will take place some time in February.
“[T]his bipartisan, bicameral committee will make a recommendation to the full Legislature on whether this is worth supporting or not,” Libby said.
The final step is to get two-thirds of the House and two-thirds of the Senate to vote in favor of the bill, as well as obtain the governor’s signature.