Nebraska businesses that make repayments on employees’ student loans would be eligible for a tax credit under a bill heard by the Revenue Committee Jan. 27.
LB685, introduced by Sen. Kate Bolz of Lincoln, would establish a tax credit for businesses that pay the principal and interest on qualifying employees’ student loans. A business would receive a credit of up to $1,800 per employee for up to 20 employees. The bill would set aside 25 percent of the credits for businesses with no more than 50 employees and limit the total credits to $1.5 million per fiscal year.
To qualify, an employee must have graduated with a two- or four-year degree from a Nebraska college or university and worked at least 480 hours during the year. The employee also would be eligible if he or she graduated from a Nebraska high school and returned to the state after receiving a degree from an out-of-state university.
Bolz said an average of 4,000 educated Nebraskans leave the state every year, making workforce quality and availability major concerns for Nebraska businesses. She said the bill would give the state’s employers an incentive they could use to recruit and retain workers. It also would help Nebraska graduates, 63 percent of whom graduate with student loan debt, she said.
Bolz said she does not know of any other state with a similar tax credit, and it could help set Nebraska apart when students decide where to take a job after graduation.
“I think this is a targeted incentive,” she said, “and I think it will help to keep young people in Nebraska.”
Nick Devine, testifying on behalf of the Association of Students of the University of Nebraska-Lincoln, supported the bill. He said the average UNL student graduates with $21,000 in student loan debt.
“While this bill will not limit the amount of debt a student leaves with, it will help them overcome the incredible burden that student debt has become,” he said. “It will let them build a firm foundation in our state, keeping them here and growing our economy further.”
Evan Fullmer, testifying on behalf of the Greater Omaha Young Professionals Council, also supported the bill. She said it would help Nebraska businesses retain talented employees and help those employees with student loan debt.
“Talent is a top concern for employers across the state,” Fullmer said. “We believe this bill creatively incents grads to stay in the state and fill Nebraska jobs.”
No one spoke in opposition to the bill and the committee took no immediate action on it.