Maine policymakers consider Augusta’s role in rising college costs Bangor Daily News Politics
AUGUSTA, Maine — A proposal by President Joe Biden would wipe out a significant chunk of college debt for millions of Americans, but how to reduce the spiraling costs that drove it in the first place remains a political challenge in debt-ridden Maine.
The president’s announcement that his administration planned to waive up to $10,000 for borrowers earning less than $125,000 individually or up to $20,000 for Pell Grant recipients led to two types of reactions: supporters calling it a long overdue answer to a major economic problem and critics panning it unfair to those who have paid their debt.
Maine and other states have come to grips with this burden after decades of divestment from public universities across the country. While student debt has become a major topic of conversation in Augusta, remedies offered by lawmakers in recent years have focused more on the symptom of debt than the root cause of cost.
The long-term financial trends in Maine are severe. Two-thirds of the University of Maine system budget was publicly funded in 1989, according to report 2021. Now it is 40 percent. Tuition fees then represented only 22% of the funding, and now represent 50% of the budget.
Maine has one of the highest debt burdens in the country, according to Institute for College Access and Success. Biden’s proposal could affect up to 177,000 Maine residents, according to the liberal Maine Center for Economic Policy.
Recent events may make the university system more dependent on tuition fees after a decade in which it has been held flat seven times. Expecting the smallest incoming freshman class in some time, the system used reserves to fill a budget gap this year and expects a $40 million shortfall through 2027.
Governor Janet Mills’ spokeswoman, Lindsay Crete, said Friday that the Democratic governor disagrees with Biden’s plan. The Democrat believes that other programs, including her recent extension of a tax credit which rewards Maine graduates who stay and work in the state, is more reasonable, Crete said.
She didn’t offer any other specific plans to reduce upfront college costs or alleviate debt, other than to say that Mills is interested in pursuing a $20 million program offering free community college to Maine high school students. graduates between 2020 and 2023. This has helped grease a 12% increase in enrollment for two-year degrees this year.
His November opponent, former Republican Gov. Paul LePage, opposed Biden’s plan more outright, with strategist Brent Littlefield saying it discriminates against those who didn’t go to college. He offered a more concrete future proposal: low-interest student loans and working with companies that employ graduates to pay off their debts.
“Paul believes education is the key to lifting people out of poverty so they can find work and become happy and productive,” he said.
Credits and tuition accounted for an equal share of Maine’s university system budget in 2008 as a recession hit the country. Investments have increased in recent years. Since Mills took office, the system’s budget has increased by 12%.
But that hasn’t been enough to meet the costs of energy upgrades needed to keep the system competitive, said Ryan Low, a former state budget commissioner who now oversees the university system’s budget. The system estimates that it is about $1.3 billion behind infrastructure needs.
“If your revenue base stays stable…you’re constantly losing ground because wages, health insurance, and those kinds of costs are going up,” he said.
There might be a bipartisan interest in reducing costs from the outset. Deputy Senate Minority Leader Matt Pouliot, R-Augusta, who has defended the revised tax credit bill, said targeted investments in the system could help in the long run, but should be coupled with a tuition fee freeze. He plans to introduce a low-interest loan bill like the one LePage launched next year.
“We need to make sure it’s aimed at reducing tuition fees and not building another building,” he said.
Deputy Senate Majority Leader Mattie Daughtry, D. Brunswick, said increased investment in the university system and student affordability would go a long way to securing the financial future of schools and ensuring that students get their degrees.
“That initial investment has a lot more impact,” she said.