Bipartisan legislation was reintroduced last week to address the student debt crisis and support our state’s economic mobility.

The bill, Workforce Development Through Post-Graduation Scholarships Act, reintroduced by Michigan Senator Gary Peters and West Virginia Senator Shelley Moor Capito, would mandate that scholarship recipients of post-graduation grant programs are not required to pay income taxes on awarded funding, similar to traditional scholarships.

The legislation would help ease the financial burden individuals face from student loan debt while incentivizing graduates to start their careers in fields that are experiencing worker shortages. 

The bill is based on the Come Home Award created by the Community Foundation of St. Clair County.

According to the community foundation, the Come Home Award is a talent retention program and pays graduates on the back end of their college career, after they have completed a degree in a STEAM-related field if they agree to move to and work within St. Clair County after graduation.

“We’re excited to partner with Senator Peters in supporting post-graduation scholarships like the Come Home program we’ve developed that is bringing the best and brightest workers back to St. Clair County,” Randy Maiers, president and CEO of the Community Foundation of St. Clair County said. “These awards are a win-win for our area: they help recipients pay back their student loan debt while putting their training and education to good use.”

Currently, unlike traditional scholarships, recipients of post-graduation scholarships are required to pay income tax on the grants they receive. According to a press release, the Workforce Development through Post-Graduation Scholarships Act would:

• Exclude Post-Graduation Scholarships from Gross Income: The bill would exclude post-graduation scholarships from gross income in the same manner as qualified scholarships.
• Ensure Recipients are Living and Working in a Community in Need: The bill includes language that mandates that any grant distributed must be directly administered to someone living and working in a community that lacks working-age college graduates.
• Provide Guidelines for Proper Oversight: The bill would give the Department of Treasury rulemaking authority to create anti-fraud rules and reporting requirements to further ensure these post-graduation scholarships, as well as the recipient and the community foundation, are not subject to abuse. It would also direct the Government Accountability Office to conduct a study on the implementation of these grants that focuses on who is receiving them, how long they receive them for, and how much is paid out, among other areas, so that the program may be improved to best meet the changing needs of communities.

CMF has continued to advocate for legislation over the years to support reverse scholarship programs.

“The Workforce Development Through Post-Graduation Scholarships Act can help Michigan promote economic mobility by attracting and retaining a skilled workforce while mitigating the student debt burden,” Kyle Caldwell, president and CEO of CMF, said. “This bipartisan legislation empowers Michigan philanthropy to partner with businesses and government to create pathways to economic stability for individuals and families. The student debt crisis is among the many pressing issues affecting economic advancement for families and communities across Michigan. CMF is grateful for Senator Peters’ leadership in supporting Michigan’s economic growth through this vital legislation.”

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