Rep. Bill Harris (R-Montana) has introduced legislation that will provide employers with tax credits if they help pay down their employees’ student loans.
Under House Bill 341, Montana employers would receive a tax credit of up to $450 per employee annually for up to three years, reports Billings Gazette. The credit may be used against their individual or corporate income tax each year.
Eligibility for the $450 tax credit would require the employer to make a direct payment of $1,800 a year to reduce an employee’s student loan debt.
“Accumulated student debt has become a huge obstacle for young Montanans attempting to prepare themselves to enter the job market,” Harris told the House Taxation Committee on Wednesday.
“With this burden, young graduates find themselves facing a tough economy, a sluggish job market and a disconnect between finding a career and employment reaching out to them,” Harris added.
The Montana Organizing Project views the state of Montana as being in a “student debt crisis.” Montana has the sixth highest debt to income ratio in the nation, with 64% of graduates leaving school with debt, owing on average $27,465.
The state has a total of $200 million in student debt hindering its economy.
Harris’ bill wants to alleviate the student debt burden and help the people of Montana build their lives.
“They want to apply the skills they have worked so hard to acquire,” Harris said. “There is no handout here, only increased opportunity for the very deserving — our youth.”
The estimated cost of the legislation for the state treasury would be $715,000 a year, according to the governor’s budget.
Harris thinks the cost is worth it because of what youth can bring to the economy.
“I contend that by reducing their debt load, young Montanans wanting to work will expand their economy with great vigor and enthusiasm,” Harris said.
Garrett Lankford, a representative for the Associated Students of Montana State University, is supportive of the bill.
“We want to go to work when we graduate, and this bill helps us,” Lankford said.
The House Taxation Committee has not voted on the legislation yet.
Photo Source: Wealth Daily, WikiCommons