2018-03-22 / Editorial

Student loan bond receives positive attention

Legislative Lowdown
by Rep. Martin Grohman

I’ve received an outpouring of feedback on the proposed $50 million bond to offer student loan financing that I’m sponsoring on behalf of Gov. Paul LePage. This program, if successful, would offer zero percent student loans and also loan refinancing. Eligibility would be tied to living and working in Maine. Plus, if you are from another state and move here to live and work, you would be eligible for loan consolidation or refinancing. The program would be administered by the Finance Authority of Maine.

We presented the bill to the Appropriations and Financial Affairs committee Thursday, March 8. You can see the video on my Facebook page. I greatly appreciated University of New England student Ryan Contois and Tufts Medical School student Emily Follo taking the time to come up and testify. The legislative process can be long and slow, and indeed we were delayed that day, so Emily and Ryan, thanks for putting down the books for an afternoon to offer your perspective. Your personal testimonies were very powerful.

Student loan debt affects countless Mainers. In fact, I’ve lived this myself. When I graduated from engineering school in 1989, I had a very significant debt load of almost $100,000. Still, that is nothing compared to what I’ve been hearing lately. I knew the problem was bad, but I didn’t realize how much worse it has gotten. One unfortunate effect is that it forces students to extend their college careers so they can work while going to school. The college dropout rate is much higher when this happens.

Our presentation of the bill was successful. In fact, no one testified against it. There was even unexpected support from the homebuilding and real estate industry. I had not realized how significant a factor ongoing student debt is in preventing a young family from settling down and buying a home, or building a new one.

There were also good ideas and suggestions that we had not thought of in drafting the bill. Among them was the idea that a stay-at-home spouse should be eligible to participate in the new program in cases of two-parent households. We also had questions about whether graduate degrees such as law and medicine would be eligible (yes, that is the intent).

It’s also important to know that this loan approach, if successful, would cover loans from accredited technical schools. That’s really important to me. So if you pursue an advanced accredited certification in machining, as an advanced auto technician, or IT/network operations, those types of education would be eligible for the zero percent financing or rate lowering consolidation as well.

Pending the committee’s feedback, the only real hurdle will be the state budget. We do not lightly propose to bind the taxpayers of Maine into an obligation that they will ultimately have to pay back, so we need to make absolutely sure this one is the right choice. And there are many other valid bond requests as well, including one that would support our centers of technology. However, I believe this bond proposal is especially valid because it will not be spent and expended immediately – instead, the loan refinancing, as it is paid back, will cycle around the economy again to finance loans for future students, giving it an effect many times over. I believe this makes it an especially good investment.

If you have ideas to improve the proposal I would like to hear them. You can look up the bill and monitor its progress by typing 128th LD1834 into your favorite search engine. Or write to me at martin.grohman@legislature.maine.gov and I will happily give you an update.

I also want to be sure that you know that many banks and credit unions already offer a student loan consolidation package backed by the Finance Authority of Maine that is available right now. This proposal is meant to enhance and not detract from that program. You can find information about the program at TheLoanforME.com. And the Educational Opportunity Tax Credit, or Opportunity Maine, is on the books and may be available to offset your loan payments against your taxes. You can find info about this at liveandworkinmaine.com. These are two good programs you can take advantage of right now. Now, back to work.

Rep. Martin Grohman of Biddeford is an Independent State Representative serving his second term in the Maine Legislature and is a member of the Criminal Justice and Public Safety Committee. Outside the legislature, he hosts a podcast for Maine entrepreneurs called The Grow Maine Show – available on Apple Podcasts – and is chair of the Biddeford Solid Waste & Recycling Commission. Sign up for legislative updates at www.growmaine.com or at facebook.com/repgrohman.

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