While Washington debates various reforms to the federal government’s student loan framework, and other states adopt borrowers’ bills of rights to the consternation of the United States Department of Education, other proposals for dealing with the student debt crisis have cropped up in legislatures across the country. In recent weeks, two such efforts made headlines. 


In Iowa, graduates from the state’s three public universities—the University of Iowa, Iowa State University, and the University of Northern Iowa—left school with average student loan debt that ranged from $24,325 to $28,617 in 2017. Sixty-eight percent of Iowa college graduates in 2013-14 had an average student debt load of $29,732; for the class of 2015-16, the overall average stood at $29,801, the 19th highest in the nation. In 2015-16, the default rate surpassed 12.5%. On March 7, in an attempt to alleviate this problem, Iowa’s Senate resoundingly passed a three-part bill, setting it up for consideration by the Iowa House of Representatives. If passed by the latter and signed by the governor, this legislation would (1) require all students at Iowa’s three universities to take a financial literacy course; (2) compel regents to provide information to graduates about employment rates, likely starting pay, and the typical graduate’s average debt in their field of study; and (3) mandate that these same regents provide students with information on how to graduate in less than four years, particularly those students who arrive on campus with college credits. 

“I hear from a lot of parents about their concerns about their children’s student loan debt,” Iowa Senate Majority Leader Jack Whitver said. “They are looking to the Legislature for solutions … .” As to the bill’s first provision, Rachel Boon, the chief academic officer for Iowa State’s regent, opined: “Helping students find ways to better manage their living expenses can also help them keep down their debt loads.” In defense of the bill’s second provision, Whitver added, “We’re just trying to get parents and kids information so that they know if they choose a certain major, what the job options are and what they can expect to make.” As to the third, he continued, “We’re not saying they have to have every major graduated in three years but there’s a lot of majors they could do.” 


Further north, Maine confronted the same problem. Sixty-eight percent of post-secondary education students graduated with student loan debt, and the average debt sat at $30,908 for borrowers who entered repayment in 2014. For 2015, the state’s default rate stood at 11%, fractionally less than the national average of 11.5%. At the same time, Maine faces an impending “demographic winter” as more of its workforce approaches retirement-age. “Our businesses need young people here to fill the jobs that will be coming available when people retire,” Governor Paul LePage warned members of the Legislature’s Appropriations and Financial Affairs Committee. “We need young people to settle here and have families. We need them to buy houses from those who retire and downsize, to keep our communities going. The longer we can have a young person here after graduation, the more likely they will make a long-term commitment to the state.” 

In response to these problems, on March 27, the legislature’s Taxation Committee commenced its consideration of a proposal, backed by LePage, intended to attract young people to the nation’s state with the oldest population by affording some student loan debt relief. In particular, the bill would create uniform rules for qualifying for the existing Educational Opportunity Tax Credit, denounced by critics as too complicated and underused by Maine employers. At present, the eligibility for this particular credit varies widely depending on an individual’s graduation year. In contrast, the expanded credit would apply to all eligible graduates with a degree from any accredited college or university after 2007 and would range from $1,000 for individuals with an associate degree to $3,000 for those with a graduate degree.  

In addition to this bill, LePage has urged lawmakers to approve $50 million in bonds to provide zero-interest student loans to Mainers attending school in-state while allowing others to refinance if they stay in Maine after college. As currently envisioned, this second bill would allow students with existing debt to consolidate loans or refinance to a lower interest rate if they agree to reside and work in Maine for at least five years. This bill represents LePage’s second such attempt: a similar bill, albeit one funded to the tune of $100 million in bonds, stalled last year largely because of Republican opposition. 

Bond measures must receive two-thirds support in Maine’s House of Representatives and Senate before they can be placed on the statewide ballot for voter consideration.