Montana grads seek help in paying college debts

Montana grads seek help in paying college debts

According to the Montana Guaranteed Student Loan Program, about 70 percent of graduates of the Montana University System have loans to repay after they graduate. Montana’s wages –

among the lowest in the country – are forcing some grads to leave the state to find better-paying work so they can pay off loans.

On Friday, the Senate Taxation Committee heard testimony on a bill that could give graduates an incentive to stay in Montana by giving employers a tax credit for helping their employees pay off student loans.

Senate Bill 304, the “Keep our Kids Here Tax Credit,” is sponsored by Sen. Roy Brown, R-Billings, and would give an employer a tax cut equal to the amount he or she contributes to a qualifying employee’s student loan debt – as much as $5,000 a year for up to three years per employee.

“So many of these kids leave college with high student loan debt, and they just don’t have many choices because they have to go somewhere where they can make enough money to repay their loan debt,” Brown said.

The problem, though, is that any new legislation that isn’t in the governor’s budget faces an uphill battle in what the governor calls a “belt-tightening legislative session.”

Depending on how many employers would claim the credit, the bill could cost the state anywhere from $4 million to $38 million in income tax revenue over a three-year period.

Brown has said that, because Montana is expected to receive federal stimulus money, the state can afford to finance a few tax cuts from its general fund, though most of the stimulus money is likely to be earmarked for specific projects.