AUGUSTA — Hoping to lend a hand to cash-strapped young adults, Democrats are pushing for a student loan forgiveness program that would help lure recent college graduates to Maine.
Sen. Nate Libby, D-Lewiston, said the “pretty bold initiative” would offer to pay off half a graduate’s student loan debt and refinance the rest at low interest.
The program eyed by Democratic lawmakers would rely on funding from a $250 million bond issue that voters would have to approve before it could go into effect.
Libby said the Finance Authority of Maine would administer the program, facilitating the payment of private debt and the refinancing of it at 1 percent or 2 percent annual rates
Rep. Jared Golden, D-Lewiston, called the proposal “really unique and creative” and likely to make a difference in the lives of many.
Libby said he’s heard from recent graduates burdened with student debt loads of as much as $150,000 — people who are making payments of $1,000 a month that leave them with nothing to spend in local shops, buy a house or sock away anything for retirement.
“We want to help free people from that debt,” Golden said.
He said it is “almost criminal” what some private lenders seek in interest payments from students who are simply to get the education they need to flourish in today’s economy.
The average debt for recent college graduates in Maine is nearly $30,000, according to the Project on Student Debt. Almost two-thirds of students in the state graduate with at least some debt, it found.
Libby said that Mainers owe close to $1 billion in private student loan debts.
Lifting the burden of some of that debt, the Democrats’ “Opportunity Agenda” says, “will allow graduates to more fully participate in Maine’s economy.”
Legislators said the debt relief would apply to loans taken since 2007, but details remain scant.
Libby said that proponents are “really excited” about the idea and aim to put it before Maine voters to decide whether it’s worth pursuing. They’ll need the backing of two-thirds of both the House and Senate to put the measure on the ballot.
Libby said they’re tentatively eyeing a 2018 public vote for the bond proposal.