Wisconsin college graduates who live and work in-state would be eligible for up to $5,000 in tax credits under a proposal Gov. Scott Walker released in more detail on Tuesday.
Walker first floated the idea of offering tax credits to alumni of Wisconsin-based institutions last month. His campaign released a policy paper outlining the plan in more detail on Tuesday, along with a statewide TV ad promoting the proposal.
Walker's plan calls for a refundable tax credit of $1,000 per year, for up to five years, for college graduates who completed their education at a college or university located in Wisconsin. The credit would be available to students who attended a University of Wisconsin or Wisconsin Technical College system school, a private not-for-profit college, or a for-profit institution.
To receive the credit, graduates would need to have earned a degree beyond a one-year degree or certificate, live in Wisconsin for at least one year after graduation, and have earned income in Wisconsin. The credit could only be claimed for one continuous five-year period, and would not apply retroactively to previous graduates.
According to data compiled in 2016 — the most recent year available — by the Institute for College Access and Success, 67 percent of college graduates in Wisconsin have student debt, at an average of $30,059 per person.
Although the tax break is billed as a way to help ease the burden of student loan debt, new graduates without debt would also be eligible to receive it. It would be available to students earning a postgraduate degree as long as they had not previously claimed it.
Students who attend an accredited out-of-state institution but maintain their Wisconsin residency throughout college and meet all other eligibility criteria could also claim the credit.
There would be no cap on the number of people who could apply each year.
"The New Graduate Tax Credit ensures Wisconsin’s graduates and Wisconsin residents receiving their postsecondary education out of state have an incentive to stay in Wisconsin, or return home to Wisconsin upon graduation," the campaign's policy paper reads.
In a new ad launched Tuesday, Walker stands at the front of a college classroom asking students if they're worried about paying for college and if they have student loan debt. In addition to the tax credit proposal, he touts his administration's six-year freeze of UW System tuition, which he has proposed extending for another four years.
Democratic candidate Tony Evers has said he would support cutting tuition in half at the state's two-year colleges and technical schools. Evers, who serves as state Superintendent of Public Instruction, has also said he would support keeping the tuition freeze in place.
"Scott Walker had eight years to address student loan debt and failed to do so. This plan is too little, too late," said Evers spokesman Sam Lau in an email. "Two out of every three college students in Wisconsin will graduate with debt, and freezing tuition doesn't solve that problem. That's why Tony Evers has pledged to pass the Higher Ed Lower Debt bill, which provides a tax break for every borrower — not just a select few like Scott Walker's plan — at no net cost to taxpayers."
Democrats in the state Legislature have repeatedly introduced legislation to create a student loan refinancing authority, which would be charged with creating a system to buy federal and private loans and refinance them at lower rates. Under the Democratic proposal, borrowers would also be able to deduct student loan payments from their income taxes.
Walker has opposed the Democratic proposal, pointing instead to a decision by the UW Credit Union in 2016 to expand its membership eligibility to include any current or former college students who currently live in Wisconsin. The credit union had offered refinancing and consolidation to its members for about three years, but previously, membership was available to past and current University of Wisconsin System students.
Also in 2016, Walker signed into law bills that made emergency grants available to University of Wisconsin and state technical college students who need them, increased funding for need-based tech school grants, funded positions to help connect students with internships and required schools to provide financial literacy information to students.
Evers' campaign said that in addition to supporting the refinancing authority, Evers would allow students to deduct student loan payments from their income tax, provide students and parents with detailed information about student loans and collect data on student debt in Wisconsin.