Pa. Gov. Tom Wolf and the horse industry are clashing over his plan to divert money for student loan relief

Gov. Tom Wolf on Thursday touted his scholarship proposal to curb student debt in Pennsylvania. But not everybody who showed up at West Chester University was happy about it.

During his budget address last week, Wolf proposed funding scholarships by diverting $204 million from the state’s Horse Race Development Trust Fund, which is used for horse owners and breeders’ winnings from races. The fund has about $250 million, Wolf said.

“We can’t solve one debt problem by creating another debt problem for the 20,000 people who work in the horse racing and breeding industry,” said Pete Peterson, executive director of the Pennsylvania Equine Coalition, who joined a group of people in that industry at the governor’s West Chester appearance.

Peterson said Wolf’s proposal would have a ripple effect on the state’s agricultural economy, damaging far more than those racing and breeding horses. It would affect everything else that depends on it, including alfalfa, hay, and mushroom farming, he said.

» READ MORE: Gov. Tom Wolf calls for $204 million in tuition assistance for students at Pa. colleges

Even before the horse owners spoke up, Wolf acknowledged Thursday that there is opposition. He said it would not affect his commitment to the proposal.

“It’s a hill I’m happy to die on,” he said at West Chester, the largest of the 14 state universities. “My choice would be to support the tens of thousands of students” in the system.

Pennsylvania, he noted, has the second highest student debt in the nation, more than $34,000 per student, — which Wolf called “crippling.”

“I just bought a new Jeep,” he said. “I paid less for that new Jeep.”

Wolf’s proposal could enable about 25,000 students who attend the state universities to graduate debt-free. It’s largely aimed at students from lower-income families already eligible for federal Pell grants and state assistance, but also could help some middle-income families. It would cover remaining tuition, fees, and room and board costs.

Those who accept the money would have to agree to remain in the state after graduation for at least as many years as they received the grant funding, or would have to pay it back.

The program is named to honor Nellie Bly, the byline of Elizabeth Cochran, who as a young woman had to drop out of a Pennsylvania school more than a century ago because she couldn’t afford it. She went on to become a prominent investigative journalist who exposed problems in a mental health institution.

His scholarship program, he said, could help the state avoid such losses of talent in the future.

That argument did little to quiet the equine industry representatives. The money from the purses allows them to care for horses and keep their industry going, they argued.

“With all due respect to the governor ... he has no idea of the economic impact that this would cause to our state,” said Peter Giangiulio, a former president of the Pennsylvania Breeders Association.