The legislative committee that came up with the remote worker program two years ago to attract new Vermonters is doubling down on incentives this year, proposing to repay up to $20,000 in student loans for workers who buy homes in Vermont’s most underserved areas.
The Senate Committee on Economic Development, Housing and General Affairs will hear Thursday from the Legislative Council and from the Joint Fiscal Office on the impact of S.331, a bill that contains a few measures aimed at helping people with the burden of student loan debt.
The bill has sponsors from that committee, including lead author Sen. Alison Clarkson, D-Windsor, and from others, including Sen. Richard Westman, R-Lamoille, who is director of the Vermont Higher Education Investment Plan at Vermont Student Assistance Corp.
The bill’s language describes historic levels of student debt as possible reasons for the drop in home ownership nationwide, especially among the young. And it calls on the Agency of Commerce and Community Development to work with the Vermont Housing Finance Authority, or VHFA, to design and implement a program that would provide down payment assistance to qualifying buyers.
Buyers working in an area where Vermont’s workforce shortage is most severe would get priority. They would have to buy homes in Vermont’s “opportunity zones,” designated areas where investors can receive capital gains tax breaks.
The down payment assistance would take the form of five annual $4,000 payments that would be sent directly to the lenders holding the buyers’ student loans, said Clarkson on Monday. She emphasized that many details of S.331 haven’t yet been worked out.
“Quite honestly, we haven’t had enough time to discuss it fully, but we’ll get to that, and hopefully get it to the House so the House can do more work on it,” said Clarkson, noting that time in this year’s legislative session is running out for bills to make the move from one chamber to another.
Members of the Senate Economic Development have taken the lead on addressing Vermont’s population decline through incentives. Their first program, a $10,000 reimbursement for new remote workers’ moving expenses that started in 2018, generated headlines worldwide and drew thousands of inquiries. The first new arrivals under that program received reimbursements last year. Lawmakers last year expanded the program to include any new workers, with a higher rate of reimbursement for people who moved to underserved areas.
The $20,000 student loan repayment proposal is one section of a larger bill that includes other ideas for easing the burden on students. Lawmakers are also looking at ways to help employers offer up to $5,000 in before-tax student loan repayment assistance as a benefit.
That idea has been promoted by Lake Champlain Chamber of Commerce, and it’s modelled after a similar program in Connecticut, said Chamber lobbyist Austin Davis. Connecticut provides a tax credit to businesses that help repay their workers’ student loans.
“If you were to do tuition assistance for an employee, that would be a tax writeoff for most businesses,” Davis said Monday. “If you were to do tuition reimbursement, it’s not. So we’re kind of looking at it from that perspective.”
There are a lot of outstanding questions in the legislation, most of them connected to the proposed $20,000 reimbursement. Clarkson said workers who received some of the annual $4,000 payments and then left the state would be required to repay the money. Asked how the state would make sure they did repay it, Clarkson suggested VHFA would be responsible.
VHFA’s Maura Collins said Monday that those details haven’t been worked out.
“There are questions that we haven’t fully worked through with Sen. Clarkson to find out how this all is going to work,” Collins said.
The Lake Champlain Chamber’s young professionals group surveyed its members last year on a number of issues and found that they had an average annual income of $57,000 and an average monthly student loan payment of $424.
“We see it as a pending financial crisis for the state,” said Davis. “We have a generation of folks who are financially behind right now because of student debt who are tomorrow’s peak earners who will hopefully be able to provide the state with the bulk of its personal income tax. Right now, they are having trouble getting started.
“Student debt is actually an opportunity to tackle some of the affordability problems across the spectrum in Vermont,” he said.
