Have you ever wanted to live in a coastal area with amazing seafood, a rich history, and easy access to mountains and nature-based adventures? Maine might be the state for you, not least because of a student loan debt relief plan recently proposed by state Democrats.
Despite its beauty and history, Maine’s local economies have been experiencing some trouble. Many people are leaving the state in favor of places with higher salaries, but even those staying in Maine are not able to invest in the community as they once could. Not surprisingly, student loans seem to be a major culprit.
Many people with student loan debt may not realize that their debt affects their local economy, not just their own household finances. State economies rely heavily on community members putting money into their community by shopping at local shops and buying real estate. But student loan debt keeps many from doing so.
The perspective is shifting regarding the problems resulting from student loans. Previously, student loan debt was seen as a problem solely between borrower and lender. Now, it encompasses more than just the two parties. Because local and state economies are experiencing negative effects, they are being forced to come up with solutions.
The solution for many states is to help ease the burden of student loan debt on borrowers so they can invest more in their local economies. Among states doing this is Maine, where state Democrats recently proposed a plan that would use $250 million in bonds to pay off half of the student loan debt originated since 2007, including debt from private loans. The remaining debt would be refinanced with a low interest rate (1–2 percent).
If passed, student loan borrowers in Maine would see great relief from their student loan debt. Legislators are also hoping that more people will move to Maine to take advantage of the debt relief and contribute to Maine’s local economies.
The plan still needs to be passed by two-thirds in the house and senate, and it needs voter approval to use the bonds, which is tentatively happening in 2018. It is an exciting start to addressing the negative effects student loan debt has on both the borrowers and their local economies.
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