Savings could be on the way for Minnesotans with student loan debt thanks to a proposed tax credit introduced today by several Senate Republicans. Senate File 941, authored by Sen. Jeremy Miller (R-Winona), Sen. Paul Anderson (R-Plymouth), Sen. Rich Draheim (R-Madison Lake), Sen. Justin Eichorn (R-Grand Rapids), and Sen. Jerry Relph (R-St. Cloud), allows tax filers to claim a credit for payments on their student loan debt.

Sen. Miller said of the tax credit, “We’re always looking for ways to make higher education more affordable, but we should also work to help the folks who have already been through college and are struggling to pay back their student loans. This bill provides much-needed relief for thousands of Minnesotans.”

“Student debt is a major concern for students, graduates and their families,” added Sen. Anderson. “This tax credit will give individuals and families, most who are just starting out, much-needed tax relief on their student loans.”

Sen. Draheim said, “Minnesotans have some of the highest student-debt levels in the nation. For many young families, their student loan payments are a significant portion of their monthly income. We have to find ways to ease some of that pressure. Saving them money on their taxes is a great step in the right direction.”

“Our students are leaving college with an unprecedented amount of debt,” said Sen. Eichorn. “Our bill will help Minnesota students deal with this debt burden as they move into the job market.”

“Minnesotans graduating from four-year schools are saddled with, on average, $27,000 in student loan debt,” added Sen. Relph. “Our state is home to incredible talent; this tax credit for student loans is a good step toward making sure our state remains an attractive place for students to live, work, and raise a family.”

A Department of Revenue analysis of a 2016 version of the bill reports that taxpayers could save $37.3 million in 2018 and $38.1 million in 2019. Similar language was included in the 2016 tax bill that passed the legislature with strong bipartisan support, but was later vetoed by the Governor.

Senate File 941 allows a refundable income tax credit of up to $1,000 for people paying more than ten percent of their income to student loans. The credit would be equal to a specified percentage of student loan payments, based on an individual’s income level and their profession. For married couples, the taxpayer and spouse may each claim the credit.