A House bill weaving its way through the state legislature in Lansing could put $1,600 in tax credits back into students’ pockets after they graduate from Michigan universities if they stay in state. Hallelujah.
Although this won’t be a silver bullet to stop the brain drain plaguing the state and help offset the rising cost of tuition, it’s encouraging to see lawmakers finally discussing college affordability.
House Bill 4182 aims to increase graduate retention rates by making it worth graduates’ while to work and live in Michigan. It was inspired by the successful Opportunity Maine Program, initiated in 2006.
To qualify for the tax breaks, a student must graduate with a bachelor’s degree from a Michigan college or university. The bill states:
1. Students would get a state income tax credit equal to half of total annual payments on state or federal student loans.
2.The tax credit cannot exceed 20 percent of the average yearly tuition for Michigan universities.
3. Students must provide proof of residency and employment in the state.
4. Students might be asked to provide proof of student loan payments made.
The continuing talent exodus in Michigan apparently is such a problem that it has it’s own term; “Michigration” often is used to describe the chronic “brain drain” — or mass departure of young, talented and technologically-savvy individuals — affecting the state.
Young people often cite lack of opportunity as a reason for leaving the dismayed Mitten, along with a want for public transportation and bustling city life. Many end up leaving for Chicago or New York City.
“Tuition tax credits are really not a big incentive,” Michael Boulus, director of the President’s Council, State Universities of Michigan, said in a previous interview.
“Students look to jobs and location as the two primary reasons (for living in a particular area).”
Boulus has a point. But although $1,600 might not be enough to keep a determined college graduate from fleeing to greener pastures, it’s good incentive for college grads to stick it out in Michigan.
Considering Michigan cut funding to public universities by about 32 percent in the past five years — causing the price of tuition to increase — offering tax breaks now on student loans seems like a moot point. The proposed tax breaks would cost the state anywhere from $318 million to $478 million in lost revenue.
Despite the bill’s shortcomings, tax breaks are much needed considering the average Michigan graduate acquires $27,451 in student debt throughout the course of four years.
Realistically, tax cuts for students are digestible to the Republican-controlled Senate, which has killed most bills that came to it with Democratic sponsorship.
Talent retention and securing a stable future for Michigan should not to be a partisan issue.
And really, that’s what it’s all about: providing the best opportunities possible for Michiganians. Without young talent to keep up a competitive economy, Michigan could find itself in an even bigger mess in the near future.
With the proposed tax breaks, recent graduates would have at least one reason to stay in Michigan.
If the credits could keep graduates in the state for even a few years, it might be enough to persuade them to stay.
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The tax cuts are a step in the right direction. Policymakers must have a discussion about keeping graduates in the state, whether through this proposal or others. Starting the discussion with House Bill 4182 could mean better and better solutions are found.
Let’s cross our fingers and hope this bill passes for the sake of curbing student loan debt and for the sake of Michigan’s future.
