LANSING – Legislation allowing those who earn a bachelor’s degree at a Michigan college or university to receive a substantial credit on their income tax for their student loans if they find work in Michigan won approval Wednesday from the Senate Finance Committee.
SB 408 would create an income tax break of up to 50 percent of the amount of federal and state student loans obtained – capped at no more than 20 percent of the average yearly tuition for Michigan’s public universities for any single tax year – for the five years after the year in which the taxpayer obtained his or her bachelor’s degree.
The tax break would cease after the 2022 tax year.
“Senate bill 408 will help to address the brain drain that the state currently experiences as students educated in Michigan leave for jobs in other states,” said Sen. Glenn Anderson (D-Westland), the bill sponsor. “This legislation serves the dual purpose of providing some relief for the increasing burden of student debt while creating an incentive for students to stay in Michigan and contribute to the local economy.”
The Senate Fiscal Agency estimates that once five years’ worth of graduates are claiming the credit, the bill would reduce revenue by $152.9 million.
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