On Tuesday, Democratic state lawmakers announced a new bill that targets higher education and the increasing costs of attending college.
If passed, the proposal would give 200 students per year an interest-free loan to pay for college, although it is unlikely to be approved by the Republican-controlled legislature.
State Rep. David Knezek, D-Dearborn Heights, along with Rep. Theresa Abed, D-Grand Ledge and state Sen. Jim Ananich, D-Flint, introduced the SMART Act, short for “Smarter Michigan and Retaining Talent.”
According to a statement, the bill will remove financial barriers to higher education.
“We have seen skyrocketing tuition that has put college out of the reach of many students,” Abed said. “For those who do graduate from college, they are in over their heads with debt.”
The bill is based on a “Pay it Forward” plan, where money from students who are paying back their loans goes directly to the next generation of students.
Students would be given a grace period for paying back the loan until they are living above the poverty line.
The payments would be 4 percent of the graduates’ income and can be paid throughout a 20-year period.
Supporters believe the main benefit of the SMART Act would be that it removes all interest normally added to student loans.
The current legislation would be a trial run for Michigan, as only 200 students from low- to middle-income families would be chosen for the program, Knezek said.
One hundred of the proposed loans would go toward students attending universities, while the other 100 would be allocated for community colleges.
Knezek stressed that the SMART Act would not be a free pass.
“Students will have to maintain a good GPA, and the program will cap the number of years that a student can receive payment,” he said.
The bill would limit community college and university students to 3 or 4 years, respectively.
For the five-year trial period, legislators supporting the bill are asking for $2 million to start up the SMART Act.
Rep. Knezek hopes that after the start up, repayments for the loans will support the cost of the program.
To electrical engineering senior Keyon Clinton, this cost is well worth the return.
“I’m a numbers guy. When you are having 200 students graduate from college, the $2 million is worth the amount of income these students will bring (into Michigan) as well as the value of being able to go to school and choose your career,” Clinton said.
Clinton said a big problem is many people are not able to afford college, and he believes these loans could give hope to students who never thought they could afford an education past high school.
“I would like to see this offer not just extended to 200 students, but hopefully more in the future,” Clinton said.
Support student media! Please consider donating to The State News and help fund the future of journalism.
