AUGUSTA – To significantly boost the number of Mainers enrolled in higher education, House Speaker Michael Saxl has proposed the creation of a fund he hopes eventually will provide as much as $2,300 a year to any Maine resident studying at a college or university within the state.

Saxl hopes that this will help more Mainers attain college degrees and will help keep more of them in the state after they graduate so that they bolster and broaden the state’s economy.

He has submitted legislation that would take budgeted but unspent state funds at the close of each fiscal year and would pour the money into a scholarship endowment. He envisions it growing to upward of $125 million over time. Interest earned on the endowment each year would be used to help cover out-of-pocket expenses of Mainers going to college in the state.

Saxl, a Democrat from Portland, unveiled the proposal Friday at a sparsely attended press conference at the University of Maine at Augusta. He was flanked by Peter Hoff, president of the University of Maine, Richard Pattenaude, president of the University of Southern Maine, and Owen Cargol, president of UM-Augusta.

The measure has bipartisan support from legislative leaders. Gov. Angus King “seemed enthusiastic about it in principal, but needs to see it in black on white,” said his spokesman, John Ripley.

Saxl wants the state to help “send every single person who wants to go on to get a degree so that the only thing limiting them is their own desire, not their economic [circumstances].”

The speaker talked in terms of “changing the economy of Maine,” pointing to the fact that it is estimated that half the jobs created in recent years require a bachelor’s degree or higher. He also noted that the average difference in annual wages between someone with a high school diploma and someone with a bachelor’s degree is $17,000.

And he pointed out that a report card released by the National Center for Public Policy and Higher Education gave Maine an F when it comes to the affordability of postsecondary education. The report found that even after financial aid was taken into account, it took 30 percent of a Maine family’s household income to cover the costs at a four-year public college; tied with four other states for 5th-highest percentage in the country.

Hoff of UMaine said that of the barriers Mainers face in going to college, “none is more significant than the financial one.”

Along with helping students, Hoff said that if the plan works, the state’s economy will see an immediate benefit because more of the “best and brightest” of Maine’s high school graduates will stay and get their education here and subsequently remain here to work.

Saxl has structured the state financial aid in a way that the aid is characterized as a loan while the student is in school, but it is converted into a grant on obtaining a degree. This way, the state funds should not supplant already existing federal grants and college scholarship, and instead will cover families’ out-of-pocket expenses, he said. “The idea is to get students more resources.”

Under federal requirements, at least 5 percent of the endowment fund would have to be spent annually. If the fund reaches $125 million, earns a return of 8 percent a year, and spends 5 percent of the principal and interest combined, it would be able to provide roughly 3,000 Maine residents with the full $2,300 grant each year. The $2,300 is the current average tuition at a Maine technical college.

During the past two years of flush economic times, lapsed balances – the amount of budgeted but unspent state funds – amounted to $25.5 million, according to the legislative Office of Fiscal and Program Review. But in the tight economic times of 1993-94, lapsed balances amounted to only $8.6 million.

While the scholarship fund banks on the lapsed balances, Saxl said at the press conference, “I may want to jump-start it.”

Taking a cue from the Land for Maine’s Future program, he is considering proposing a $50 million General Fund bond that would have to be approved by voters.

The legislation includes a mechanism to use endowment funds to leverage money from private foundations. If a private source puts up at least $500,000, the state would match that amount, provided the money is used by the foundation for scholarships.

Though not disclosing sources, Saxl said he has “already identified $16 million in private funds, so I think we can get to $32 million this year.”

Attending the press conference was Wade Morrill of Bingham, a sophomore at UM-Farmington where he is studying political science. Morrill is the recipient of a $1,000 a year George Mitchell Foundation scholarship, plus $2,000 in aid from the school.

Morrill, whose father is a clerk in a general store and whose mother is a high school teacher’s aide, said that if it weren’t for the aid package, “I’d probably be working at one of the mills or in the woods.”