Day said her bill “keeps skin in the game for everyone involved.” It doesn’t provide wholesale student loan forgiveness, nor does it give businesses a 100% tax credit for making student loan payments.
The total credits would be capped at $1.5 million annually, Day said, with at least 25% of the credits being set aside for small businesses with fewer than 30 employees.
“Nebraska has some really robust corporate tax incentives for very large businesses, and I have always wished we did better as a state to support … small, locally created and locally owned businesses,” Day said.
Education groups backed the plan, saying it provided an incentive to both employers and employees.
If employers paid a total of $3,600 toward an employee’s student loan debt — the amount needed to qualify for the full $1,800 tax credit — and if employees matched that amount, most college graduates could pay off their loans in four years, said Treva Haugaard, executive director of the Council of Independent Nebraska Colleges.
“This type of employer incentive allows a recent graduate to have hope that they will not continue to be in debt for the following 10 years,” Haugaard said.
Once that debt is paid off, those employees will have more disposable income to help generate economic activity, she added.