Aging Maine repays college debts to attract younger workers

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Maine, land of lobsters and lighthouses, is also the nation’s oldest state. With a median age of 43, roughly a third of its population is in or approaching retirement. To counter its aging workforce, the state is attempting to attract more recent college graduates by helping to repay their student loans. Hari Sreenivasan reports as part of our weekly education series, Rethinking College.

Judy Woodruff: Now: one state's plan to counter an aging work force by helping students reduce their debt level.

Hari Sreenivasan has a report tonight on what Maine is promising college graduates if they agree to live and work in the state for the next four Tuesdays — they agree to live and stay in the state.

And that is, we're going to be looking at it for the next four Tuesdays at different ways of Rethinking College. It's a periodic series we do for our weekly segment on Making the Grade.

Hari Sreenivasan: Maine is famous for noisy gulls and fishing ports, endless miles of rocky coastline, lighthouses that seem made for postcards, and, of course, the crustacean that is dipped in butter and served up for a luxurious dinner.

But the state is also known for having the oldest population in the nation. The median age here is 43, and the trend has some local businesses concerned.

Dana Connors is the president of the Maine State Chamber of Commerce.

Dana Connors: Right now, 400,000, or a third of our population, is at retirement, has recently retired, or is about to retire.

Hari Sreenivasan: In order to reverse that aging work force, lawmakers here came up with an idea, an offer to all recent college graduates: Come and live and work in Maine, and we will help you pay off your student loans.

State Rep. Mattie Daughtry: Come back home, we will help you pay off your student debt.

Hari Sreenivasan: Mattie Daughtry is a state House representative from Brunswick. She owns a local brewery and was one of the sponsors of Maine's student loan payback offer.

State Rep. Mattie Daughtry: The fact of the matter is, for my age group, we have some very serious issues facing us as far as being able to be a part of the American dream. When you have student debt, it can be hard to get a car. It can be hard to look at other jobs. It's really becoming a barrier to those next steps to the American dream.

Hari Sreenivasan: According to the Federal Reserve Bank of New York, in 2017, Americans owed $1.4 trillion in student loan debt, and the amount of money borrowed doubled in the past eight years.

The debt relief comes in the form of a tax credit. It allows college graduates who work in the state to deduct student loan payments from their state income tax.

State Rep. Mattie Daughtry: It can be over a 10-year plan. The amount varies whether it's a STEM degree or not. If it's a STEM degree, it is up to a $5,000 credit. And then if it's a non-STEM degree, it's about up to $3,500, $4,000.

Hari Sreenivasan: Daughtry took out a student loan. In order to save money after college, she moved back home to Maine and for a time lived with their parents. She says many graduates who left Maine need a financial incentive to return.

State Rep. Mattie Daughtry: A lot of our friends keep saying they want to come back to Maine. And they say, when we have saved up enough money or we have paid off our student, maybe we will be able to return.

There's a real strong draw to come home, but they're not able to pull down the types of salaries that they can get in Boston, New York, Washington, D.C.

Erika Skiff took out $70,000 in loans to earn a bachelor's degree in nursing from St. Joseph's College.

Erika Skiff: It's a little overwhelming when you go through school, and it's — you don't think about it, and then you graduate, and it's like, oh, I have to pay all this back now. And, yes, it's definitely overwhelming each month.

Hari Sreenivasan: This summer, she and her husband, Elias (ph), had their first child. Erika was given a four-week maternity leave from her nursing job at 66 percent of her normal pay.

Erika Skiff: That 33 percent have left a pretty significant dent in the finances.

Hari Sreenivasan: Using the educational tax credit, Erika receives $4,500 a year.

Erika Skiff: That credit allows us a little more wiggle room than we would normally have. I'm able to stay home without feeling the burden so much of not having the pay that I normally would have at work.

Nate Wildes: Student debt is a huge issue here in Maine, just like it is across the country.

Hari Sreenivasan: Nate Wildes markets the tax credit for a campaign called Live and Work in Maine. We walked through downtown Portland as he explained how important a post-secondary degree can be to employers.

Nate Wildes: The commitment made is made to individuals who have invested in themselves, invested in their higher education. It's to recognize the fact that $1 is $1, but student debt is something different. Student debt is a recognition that you have invested in yourself.

You have given yourself skills, whether over two, four, six, eight-plus years, that you didn't have before and that now adds value to you in the workplace.

Hari Sreenivasan: The credit is also an attempt by Maine to upscale their workforce.

Wick Johnson, the president of Kennebec Technologies in Augusta, says today's work force calls for a secondary education. The company produces high-precision parts for aerospace defense and technology companies. Johnson says higher education is necessary to be globally competitive.

Wick Johnson: In and of itself, the bachelor's degree, the piece of paper is not — not a requirement. But we work in a very sophisticated environment. What we do is driven by the expectations of the market. And you have to have that work force in order to comply with the expectations.

Hari Sreenivasan: For Drew Leeman, a design supervisor at General Dynamics' Bath Iron Works facility…

Drew Leeman: This is probably about a 300-foot ship.

Hari Sreenivasan: … who helps design Navy vessels, the tax relief goes toward $110,000 in student loans.

How does that $4,000 impact your life?

Drew Leeman: It impacts me greatly. Getting it in, like, bulk right in the beginning of a year from a tax credit, it's — you can do whatever you want with it. You can buy a new car. You can buy a new house. You can do a lot with $4,000.

Hari Sreenivasan: Matthew Glatz thought about leaving Maine for work, but decided instead to stay and open his own business. The tax credit has meant he can pour money back into the food truck cafe he opened three years ago.

So how much of a consideration did you give the tax breaks in deciding whether to stick around or not?

 Matthew Glatz: My full amount is $373 a month that I can get back maximum reimbursement, which is more than my monthly payment. So, essentially, my students are paid in full by the state as long as I stay.

Hari Sreenivasan: As her Mattie Daughtry's student loan debt, she graduated too early to qualify for the tax credit she helped sponsor, and she cannot take advantage of the program.

So, how long did it take you to get out of debt? Are you out?

State Rep. Mattie Daughtry: No. I still have $4,982 left. Not that I checked this morning.

Hari Sreenivasan: In Maine, for the "PBS NewsHour," I'm Hari Sreenivasan.

Click here for the PBS NewsHour video.

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