Reps. Rogers And Blair Introduce Ohio Graduate Debt Assistance And Employment Incentive Act
Legislation aims to reduce burden of student loan debt and encourage businesses to hire recent Ohio graduates
August 26, 2013
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COLUMBUS- State Reps. John M. Rogers (D-Mentor-on-the-Lake) and Terry Blair (R-Washington Twp.) have jointly introduced House Bill 246, “The Ohio Graduate Debt Assistance and Employment Incentive Act”.  This legislation is designed to adjust the taxable income of recent graduates based upon their out of pocket Qualified Higher Education Expenses incurred for tuition, fees, books, supplies, equipment, room and board, and special needs beneficiaries.

A second major provision includes an economic incentive for employers who expand their workforce by hiring a new graduate.  For employers, the newly hired graduate’s employment related expenses are used as to adjust the receipts upon which the employers commercial Activity Tax (CAT) is calculated.

“Many Ohioans have accumulated significant personal debt while pursuing education beyond high school in an effort to obtain secondary degrees and certifications,” said Rep. Rogers.  “Each individual who chooses to increase their marketability in today's competitive job market must weigh the benefit of furthering their education against the personal risk of incurring significant debt at a young age. Graduates fortunate enough to find post graduate employment, often find themselves at the lowest level of their earning potential, regardless of a career path, while at the same time beginning to repay their student loans.”

“In an effort to attract additional businesses, to support those already established, and to help grow the workforce here in Ohio, it is essential that we keep educated and talented graduates. Additionally, the employer incentive component of this legislation is very significant. Its design is another approach of partnering with the business community, while providing an eye towards Ohio’s economic growth.  Rep. Blair and I strongly believe this legislation will serve as another tool in this regard while strengthening the relationship between our workforce and employers.” 

“The future of our state, indeed our nation, is in the hands of our children,” said Rep. Blair.  “Certainly as legislators, we must address the high cost of education.  However, we must also provide our children with certainty that their education is important; and, we must provide them with hope that their education will be worth the investment - both personally and financially.  Our values evolve from our experience.  And the lifelong endeavor of learning enhances that experience.  Working and learning go hand in hand and serve to build character and solidify values in our children.  This will help ensure that our state’s future will be secure.

“We believe our legislation will serve to reinforce in our children the importance of education,” continued Rep. Blair.  “We also hope that it will give them a realistic and fair opportunity to develop life skills, self worth, and personal responsibility to become productive members of society.  At the same, this legislation will show businesses that Ohio is serious about education, can and will provide a well-qualified workforce.” 

“If we are right, then, the quality of life of all Ohioans will be greatly improved. But just as importantly, our children’s future will become much brighter.”   

HB 246 would require calculating the actual applicable costs by completing a worksheet on which all qualified education expenses for a graduate would be listed. The sum of these expenses would then be reduced by any amounts received in the form of grants, scholarships, 529 or similar payments, netting the students actual out-of-pocket expenses.  This net figure would then be the basis of a reduction to the graduates Ohio 1040IT AGI or Adjusted Gross Income spread out over the following specified period of years: 5 years for successfully completing a technical program or an Associates Degree and 10 years for a baccalaureate, post-graduate and/or a professional degree. 

For the employer, a reduction would be applied to the commercial activity over a five year time frame, and is incumbent on the employee remaining employed throughout the period. The employers’ Commercial Activity basis effectively would be reduced by 100% of the new employee’s related costs incurred in the first year, 50% in the next year, 25% in the third, and continuing through the fifth year.   In the event that the new employee would leave within this time frame, his or her replacement enables the employer the continued commercial activity (CA) basis reduction from the point of change until completion of the initial five year period.

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