Op/Ed: By taxing student loan forgiveness as income, Indiana unfairly burdens teachers
Educating our children is one of the most important duties we have as Hoosiers. That duty is written into Article 8 of the Indiana Constitution, which provides in relevant part that “it shall be the duty of the General Assembly to encourage, by all suitable means, moral, intellectual, scientific, and agricultural improvement and to provide, by law, for a general and uniform system of Common Schools, wherein tuition shall be without charge, and equally open to all.” That was the laudable promise of our Constitution in 1851, but the reality 170 years later is less utopian, perhaps even minimalistic. Not only do our children lag behind in proficiency standards when compared to other states, so do teacher salaries. High proficiency standards are positively correlated to teacher pay. Historically, low investment in K-12 education is to blame for both phenomenon.
The teaching profession has changed drastically over the last two decades. The public perception that we can pay teachers less because “teachers have the summer off” is misguided and misplaced. With extended school years, additional in-service training and safety requirements, teachers have very little time from when one school year ends to when the next one begins. I wonder how many of us would be successful at getting a meaningful or decent paying summer job if we were effectively employable for only one month. Sadly, teachers are required to focus on so many things other than teaching, they have little time to actually teach and when they do, they do so under a constant cloud of worrying over whether the next incidence of school violence will be at their school.
At the outset of every legislative session, the General Assembly and the governor always talk about how important education is to their respective agendas. This year is no exception. While things have improved in recent years, education is not an area where we can rest on what little laurels we have, and frankly, aspiring to be better than Kentucky, Mississippi or Arkansas is not enough. We must look at every opportunity to continue improving. Generally, I am pleased that teacher salaries are on the rise in Indiana, but they still lag and more can be done with a low cost to taxpayers by specifically targeting tax relief for teachers.
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Over a decade ago, Congress passed and President George Bush signed legislation addressing the shortage of teachers, in part establishing teacher student loan forgiveness and public service student loan forgiveness programs. These student loan forgiveness programs are not the same as the recent controversial student loan debt cancellation initiative, which, if it stands, applies across the board to all student loans, not just for teachers and other public servants. I can understand the controversy, but the demand for students with a teaching degree is comparatively higher than the demand for students with the proverbial degree in basket weaving (if such a degree truly exists). Many teachers went into education expecting their loans to be forgiven after meeting all of the requirements, which involve a commitment to teach. Those promises are coming to fruition and student loan debt for teachers is finally being forgiven based on these programs.
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Even so, the state of Indiana continues to tax teacher student loan forgiveness as income, whereas the federal government does not. A teacher friend recently found out that a substantial amount of her student loan debt was forgiven through the program. The state of Indiana will now tax her without any prior warning to my friend that the forgiveness by the federal government was imminent. Most people, including teachers, simply do not have enough flexibility in their budgets to pay the state an extra few thousand dollars. So much for the teacher salary increase for my friend this year. But there is an easy, ethical and moral fix. I would respectfully urge the General Assembly to pass legislation for the governor’s signature to simply exclude teacher student loan forgiveness from taxation and live up to our constitutional duty to educate our children “by all suitable means.”
Joby D. Jerrells is an attorney and former charter school board founding member of the Springville Community Academy, in Lawrence County, Indiana.
This article originally appeared on Indianapolis Star: Indiana, do right by teachers. Stop taxing forgiven debt as income
