Finance Committee Passes Student Loan Debt Relief Legislation

HARTFORD, CT – Today, the Finance Committee passed Senate Bill No. 72, a bill that would make Connecticut a more affordable state for recent college graduates and the companies who hire them. The bill earned bipartisan support and will help address the growing student debt crisis.

State Senator Alex Bergstein (D-Greenwich), Senate Chair of the Banking Committee, originally introduced this bill, which was then referred to the Finance Committee and approved today. The amended bill is the product of a collaboration between Sen. Bergstein and State Senators Will Haskell (D-Westport) and James Maroney (D-Milford). It creates a tremendous opportunity for Connecticut to retain and attract talented, young college graduates.

Senate Bill No. 72, “An Act Establishing a Tax Credit for Employers That Make Payments on Loans Issued to Certain Employees By The Connecticut Higher Education Supplemental Loan Authority,” creates a tax credit for employers who make payments on the student loans of qualified employees.

Individuals can receive relief if they are state residents, are employed full-time, received education loans or refinanced loans through CHESLA and graduated in the last five years. Employers who make payments directly on the behalf of their employees can receive a 50 percent tax credit on those payments. Employers cannot claim credits for more than five taxable years per employee or for loan payments greater than what an employee owes in a year.

“By offering Connecticut college graduates a compelling reason to live and work in the state for five years post-graduation, we will build a talented workforce that generates more revenue for our state and builds a sustainable and thriving economy,” said Sen. Bergstein.

“I want to thank Senator Bergstein and Maroney for all of their hard work on this, as well as my colleagues on both sides of the aisle who supported it today. As legislators, we hear constantly from business leaders that they have trouble recruiting a skilled workforce in Connecticut. We do such a good job of educating students, it’s time this state does a better job of keeping these graduates in Connecticut so they can become taxpayers and homeowners,” said Sen. Haskell. “This is a win-win method of addressing student loan debt. It lends a hand to college graduates and incentivizes them to stay in Connecticut after graduation. It gives our employers a reason to hire locally and creates a more friendly tax environment. Every dollar of tax credit given by the state will translate to debt relief for student graduates, benefitting the Connecticut economy.”

“One of my goals this session, and something I campaigned on, was to provide our state’s college graduates with some college loan relief,” said Sen. Maroney. “I applaud state Senators Will Haskell and Alex Bergstein and the rest of the Senate for advancing this legislation. Right now, the only debt that outweighs college loan debt is having a mortgage. We cannot continue to allow our state’s residents to be burdened in this way.”

In public testimony, Sen. Maroney said student loan debt in Connecticut more than doubled from 2008 to 2017, and the Connecticut Realtors supported the legislation, noting first-time home buyers are delayed, on average, by seven years due to student loan debt.

“CTR believes that Connecticut has the opportunity this session to establish our state as a leader in addressing the student debt crisis,” Connecticut Realtors testified.