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On Wednesday, a Michigan House panel began debating a new bill concerning student loan payments.
The Michigan Competitiveness House Committee met to debate House Bill No. 4182, which was proposed by Michigan State Representative Andy Schor on Feb. 5, 2013.
Under the bill, Michigan residents who graduated from a public or private university or college in the state could claim income tax credits for their student loans. The credit would be equal to 50 percent of student loan payments made during the previous tax year. The credit cannot exceed 20 percent of public universities’ yearly tuition costs, or a total of $2,150.
The bill was introduced to encourage students to stay in the state of Michigan after graduating from college.
Representative Schor told loans.org that a “brain drain” is occurring because talent is leaving the state of Michigan each year. It is estimated that Michigan loses about 40 percent of in-state college graduates annually.
“We lose too many,” said Schor. “We should focus on keeping them here.”
Schor said that this bill alone would not keep a graduate in Michigan if a more profitable offer is available out of state, but that is it “one idea as a part of a greater retention strategy.”
“There are many that want to stay here. It’s not an end-all, it’s not going to pay off all their debt, but it’s a part of the equation,” he said.
Schor said HB 4182 was inspired by the successful Opportunity Maine Program which was initiated in 2007.
After today’s session, HB 4182 is still under consideration. The only opposition currently facing the bill is concerned with what the tax break will cost the state, and if it is worth the benefit of graduate retention. According to the House Fiscal Agency of Michigan, income tax revenue would drop by an estimated $240 to $420 million per year.
Schor said the morning committee meeting went well and the Chair agreed to have another hearing. Updates are available on the Michigan Legislative website.