Make room on the bandwagon for Sen. Kate Bolz’s bill to give employers a tax credit if they help pay an employee’s student loans; the Journal Star editorial board wants to jump on board.
Bolz’s bill, LB685, received supportive testimony at a public hearing last week. Now it faces a long road to enactment, with filibusters and other senators’ priorities consuming large chunks of the 60-day session.
Under Bolz’s plan an employer would get a credit up to $1,800 toward the business’s state income tax for half of an annual payment made to an employee’s student loan.
Bolz said the plan is aimed at the top concern of the Nebraska’s business leaders – growing a talented workforce for the state.
With a state unemployment rate of 2.9 percent in December – the second lowest in the country – one of the biggest challenges that Nebraska businesses have is finding and keeping good employees. The bill would give them a new tool.
As Evan Fullmer of the Omaha Young Professionals Council told state senators, the plan would alleviate Nebraska’s brain drain. About 4,000 students leave the state every year after they graduate.
"We really view it as a dual solution and a creative solution and something to entice our young people to stay,” Fullmer said.
The same theme was echoed by Nick Devine of the Association of Student of the University of Nebraska, who said the program would factor into the decision of students when they look for a job.
Bolz pointed out that students in Nebraska have an average of $26,000 in student loans when they leave college. On average students make loan payments of $3,600 a year, or $300 a month, she said.
The program is designed with safeguards to ensure that its policy goals are met. The loan payments must be made directly to the student loan provider. To qualify an employee must either have graduated from a college or university located in Nebraska or have graduated from a high school in Nebraska and then graduated from a college or university in another state and returned to Nebraska.
Experience has taught that the untrammeled growth of tax credits can be a problem for government.
Bolz’s bill, however, would cap the program at a cost of $1.5 million a year, which is enough for employers to provide the maximum amount of help to 833 graduates.
Passage would be good for graduates, good for businesses and good for the economy. We hope the bill can make it to the finish line.