A bill establishing an annual $1.5 million tax credit for Nebraska businesses who help employees pay back student loans drew broad support during a Revenue Committee hearing last week.
Introduced by state Sen. Kate Bolz of Lincoln, the bill (LB685) provides $1,800 in nonrefundable tax credits toward a business’s state income taxes for every employee enrolled in the program beginning next year.
The credit equals half of the annual student loan payment, up to $3,600, and could be claimed by up to 20 employees per business, with the loan payment paid directly to the loan provider or servicer.
In all, the credit could help as many as 833 people annually in Nebraska, where the average debt upon college graduation has grown to $26,000.
Bolz said the incentive addresses the No. 1 concern of the Nebraska State Chamber, calling the program “a tool to keep the best and brightest here in the Cornhusker State.”
Nick Devine, who spoke on behalf of the Association of Students of the University of Nebraska, said he believes a student loan repayment program would factor into the decision of some college graduates wishing to remain in the state.
Answering a question from Sen. Paul Schumacher of Columbus, Devine said many students support the program even though they might not qualify.
“If we continue moving forward and we find this program successful, you might find another student here in two or three years asking for it to be expanded,” Devine said.
Tip O’Neill, president of the Association of Independent Colleges and Universities of Nebraska, a coalition of 14 institutions, said Nebraska businesses would also find the incentive helpful for recruiting college graduates.
“We tend to export more highly educated people than we import,” O’Neill told the committee. “We haven’t created enough jobs for the citizens we have educated here in Nebraska, and this may give some incentive for employers to generate some jobs that will keep some students around.”
Community college graduates in Nebraska would also be eligible for loan payback, said Dennis Baack, executive director of the Nebraska Community College Association.
“In the community college system, we keep about 90 percent of our graduates in the state now, but it might provide the other 10 percent the incentive to stay,” he said.
Evan Fullmer of the Omaha Young Professionals said the bill addressed two big concerns -- talent retention and student loans.
No one testified against the bill during Wednesday’s hearing.