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In shadow of UM partnership, lawmakers pushed student debt relief

This year’s General Assembly session included a lengthy discussion over the future of two major universities, but Maryland lawmakers also sought to address the high cost of higher education.

Jay Perman (File)

UMB President Jay A. Perman (File)

Though the initial version of the University of Maryland “strategic partnership” bill drew fire from some higher education officials, their concerns were largely addressed before the bill advanced.

Lawmakers added language clarifying that the College Park and Baltimore institutions would not be merging and that each campus would retain its own president – earning the bill a green light from UMB President Jay A. Perman and the University System of Maryland. It eventually passed both chambers.

While Republican Gov. Larry Hogan has said he won’t sign the bill – he clashed with the legislature over spending mandates this year – he won’t veto it, either, and it will still become law.

Meanwhile, lawmakers passed several proposals aimed at keeping down the cost of a college education, helping students avoid excessive loan debt, and supporting the commercialization of university research.

Hogan and the legislature agreed to a fiscal 2017 budget that holds tuition increases for public colleges and universities to 2 percent — which came as good news for the university system, which initially expected a larger hike. The system’s Board of Regents is scheduled to vote on next year’s tuition rates Friday.

The legislature also created a tax credit for people who have incurred at least $20,000 in student loan debt; those with at least $5,000 still outstanding can apply for a credit up to $5,000 that must then be used to pay down their debt.

That same bill also calls for the state of Maryland to start providing matching contributions for some college savings plans administered by the College Savings Plans of Maryland – a move that could help as many as 20,000 people start saving for college in its first year and even more in subsequent years, said Lauren Shipley, the agency’s executive director.

Starting in 2017, new accounts established under the Maryland College Investment Plan will be eligible for a $250 annual contribution from the state as along as the account holder makes less than $112,500 per year – or $175,000 per year for a married couple.

The minimum amount account holders will have to chip in to qualify for the state contribution is staggered based on income; a single person making less than $50,000 must contribute at least $25 per year, for example, while a married couple making between $125,000 and $175,000 must invest $250 per year to get the match.

“It gives us another tool to encourage people to start saving for college,” Shipley said, adding that saving ahead of time rather than taking out student loans – and paying interest – can cut the cost of a college education nearly in half. The money invested in these accounts can be used at most colleges and universities nationwide, she said.

Legislative analysts reported earlier this year that relatively few families participate in the plans, known as 529 accounts, and the ones that do tend to be from wealthier areas of the state.

A statewide study approved by lawmakers this year will explore other ways to mitigate the burden of student loan debt, including establishing a state body to refinance student loans.

Consumer protections for students at for-profit colleges and careers schools were also approved by the legislature this year. Those institutions must now provide more information about their net costs and average debt load of their students and are forbidden from enrolling students in programs in fields that require a license if they can’t actually provide students with the education needed to get those licenses.

The University of Maryland partnership proposal, which included additional funds to support commercialization of university research, prompted Morgan State University to request more money for its commercialization efforts. Lawmakers approved a bill allocating $3 million over three years to support the school’s Office of Technology Transfer.

Lawmakers also extended tuition waivers for Maryland public colleges and universities already available to children placed in foster care in the state to young Marylanders whose foster-care placements land them outside of the state, such as in Delaware or Pennsylvania.

But a proposal to offer full-tuition waivers for many community college students failed for the second year in a row, as did a bill creating an income tax credit for community college tuition payments. The sponsor, Del. Keith Haynes, D-Baltimore City, said when the bills was introduced that he wanted to at least add to the discussion of making college more affordable.