Say Anything Blog

North Dakota Americans for Prosperity Director Dustin Gawrylow has some better suggestions (when compared to Governor John Hoeven’s plan for a new $40 million tuition entitlement) for addressing North Dakota’s tuition problem in the Grand Forks Herald today.

Here’s a run down of his suggestions:

*Increase the grace period for student loans.

Currently, each graduate has six months from the time of graduation before the first payment is due. The Legislature should extend this grace period to one year to allow more time to find a reasonable job in North Dakota and get on their feet.

*Reform the Bank of North Dakota’s student loan practices.

One-third of all Bank of North Dakota profits ($51 million total profits in 2007) are derived from the Student Loan Department. This department should be converted into a not-for-profit operation.

The bank must be allowed to charge an interest rate equal to operating and administering the student loan programs. However, there is no need for a state-run bank to be adding to the debt load and prolonging the payoff of student loans.

*Create a higher education tax credit.

In an age when education costs were paid in the year incurred, treating those costs as a tax deduction effectively encouraged people to go to college. But with the cost of higher education soaring, the costs are much higher than most can afford in a given year. These days, the costs often take the form of student loans, which North Dakota’s college graduates incur at or near the nation’s highest levels.

At the same time, the economic impact of higher education continues to grow. A college graduate may be expected to pay more than $100,000 more in state and local taxes than a peer without a college degree over a lifetime.

We must encourage individuals who have earned a bachelor’s degree to live in the state with a higher education tax credit. The credit would be claimed by those individuals who have earned their bachelor’s degree at a North Dakota college or university within the past 10 years and have established residency in North Dakota during those years.

The credit would be accessed through individual tax filings. In that way, it would not require any new department or agency.

Are these good suggestions?  I think they’re reasonable enough, and certainly better than $40 million in new government spending, though I think the better solution is to end subsidies and entitlements for higher education as they’re doing nothing but driving up the cost of tuition.  And adding more tax credits to our already too-complicated tax code is a bad idea.

Regardless, I don’t even know how serious the Governor his about his proposed plan.  Part of me thinks that he may have offered it as little more than a big, fat chunk of feel-good spending that he could claim we can’t afford if the initiated measure for state income tax cuts (which he opposes) passes.