Cities Offer to Pay Student Loan Debt to Gain Young Residents
(NEW YORK) -- In Niagara Falls, N.Y., a man shortly will attempt a daring feat -- and he isn't Nik Wallenda. Seth Piccirillo, Niagara Falls' new director of community development, will attempt to lure young professionals to live in his city's beleaguered downtown, which for decades has been hemorrhaging residents -- young ones especially.
He'll do it, he says, by offering to help them pay down their college loans.
Here and there around the U.S. -- from rural Kansas to Detroit -- communities concerned over shrinking, aging populations are attempting novel experiments to attract the young. If they're not offering to pay off student loans, they're dangling other incentives aimed at budding professionals.
Niagara Falls' population 50 years ago teetered at 100,000. Then it began to fall and today it's half of what it was. If by the time of the next census it's under 50,000, leaders fear the city will risk the loss of some forms of federal assistance.
"We've lost a lot of talent, a lot of brain power," admits Piccirillo. "For 50 years we've been asking ourselves: how do we keep our young people?"
The city, he says, never really had a plan -- until now. It's putting an initial $200,000 behind attracting young people from elsewhere by offering to pay their student loans.
The first applications should arrive in the next couple of months, says Piccirillo, but "the graduating class of 2013 will be our first real swing at it."
He says he got the idea by reading news headlines.
"College debt is at the forefront of so many stories you see now," he says. "The New York Times just reported that student debt has topped $1 trillion; 94 percent of students now have some amount of debt."
Under Niagara Falls' plan, graduates who have earned a 2- or 4-year degree in the past two years can apply for up to $3,500 a year (for two years) towards repayment of their student loans. The same deal would be offered to graduate students. Graduates of Niagara University and Niagara County Community College will be targeted first, though the city hopes eventually to recruit graduates from other parts of the country.
To qualify, applicants will have to rent an apartment or buy a home within a designated downtown area.
In rural Kansas, a similar experiment is underway. Fifty counties in the state have established Rural Opportunity Zones (ROZs) authorized to offer one or both of the following financial incentives to new full-time residents: Kansas income tax waivers for up to five years and/or student loan repayments up to $15,000.
To be eligible for loan repayments, applicants must hold an associate's, bachelor's or post-graduate degree; must have an outstanding student loan balance; and must establish residency in a ROZ county.
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