Governor Larry Hogan talks at a press conference at the state house.
Governor Larry Hogan talks at a press conference at the state house. (Capital Gazette file)

Gov. Larry Hogan announced plans Tuesday to spend $17.5 million next year to defray rising tuition at many public Maryland colleges.

Along with his proposed 2 percent cap on in-state tuition increases, the governor pitched a small tax break for many state residents repaying student loans.


Both initiatives need General Assembly approval and come as the governor must close an estimated budget gap of more than a half-billion dollars.

Individuals making up to $200,000 a year would be able to deduct student loan interest payments from their state income taxes under Hogan's plan, which he described in broad terms during a news conference at the University of Maryland, College Park. Student loan interest is often deductible from federal income taxes.

Hogan, a Republican, said his "targeted" proposal would provide "much-needed relief" to thousands of students saddled with debt or struggling to pay for college. Last year, he also proposed a 2 percent cap on in-state tuition increases.

The governor predicted his plan will be popular with Maryland residents and therefore will have bipartisan support in the Democratic-dominated legislature. Lawmakers return to Annapolis Wednesday for their annual 90-day session.

"Student debt is one the biggest problems facing America," Hogan said. "It's certainly affecting a lot of our young people. ... I hear about it everywhere I go."

Hogan spokesman Amelia Chasse estimated that the proposal would return $20 million to taxpayers each year.

The student loan tax break is the third piece of Hogan's legislative agenda that borrows from ideas traditionally championed by Maryland Democrats. He has also proposed a version of paid sick leave and a tax credit for manufacturing companies that move to low-employment areas in the state.

The legislature passed a student debt relief bill last year that granted students with debt in excess of $20,000 a $5,000 tax credit. The credit will cost the state $5 million in the next fiscal year.

Hogan let the measure become law without his signature, a fact that irritates advocates.

"Last year, he wouldn't put his name on our initiative," said Sen. Richard Madaleno, vice chair of the Budget and Taxation Committee.

Madaleno, a Montgomery County Democrat, said Hogan's proposed tax deduction may not deliver as much relief as last year's proposal, but more people would likely qualify for it.

He added that he expects the legislature will approve the tuition cap, and said he would have been surprised if Hogan had not proposed it.

In recent years, governors have frequently increased aid to higher education to limit tuition increases to between 3 percent and 5 percent. Tuition rates were frozen during four years of the O'Malley administration.

Without additional state aid this year, Maryland public colleges were expecting to raise tuition by as much as 5 percent, Hogan said. He said the extra money he will include in his budget proposal will limit increases next fall to 2 percent at all 12 University System of Maryland schools, as well as Morgan State University and St. Mary's College.


Morgan President David Wilson said his school was looking at as much as a 6 percent tuition increase for the next school year. Wilson said energy costs, state and federal mandates and an increased need for student support services are driving costs higher.

But Joy Joelene Griffin, Student Government Association president at Morgan, was not impressed by Hogan's proposal. "I definitely don't support a tuition increase, period. At all. I don't think there should be one." Griffin, a senior political science major, said she is apprehensive about being able to repay her students loans.

St. Mary's College President Tuajuanda C. Jordan said her school has been weighing a 2 percent to 4 percent tuition increase. She said the college's biggest expense is paying and retaining faculty. "You have to pay for high quality," she said.

Hogan's proposal to curb tuition increases leaves fewer options for closing the state's $544 million budget gap.

Most spending in the state budget is mandated by law. Higher education spending is not, and so was among three areas identified by House Speaker Michael E. Busch in December as places governors typically target when looking for cuts.

Prisons and Medicaid were the other areas identified by Busch.

Baltimore Sun reporter Tim Prudente contributed to this article.