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Friday, June 29, 2012

Rural Communities Offer To Help Pay Student Loans To Lure Recent Grads

According to Finaid.org, about two-thirds of students who graduated from college in 2008 had student loans. And the average total debt is just over $23,000. Now, some rural communities are offering to help recent grads — they’ll pay off a portion of the loan, if the grads move there. Niagara Falls, in New York state, is trying it. Nebraska has expressed interest. And the Kansas Department of Commerce just started a five-year pilot called the Rural Opportunity Zone program. Here & Now’s Deb Becker spoke with Chris Harris, program manager of the Kansas rural opportunity zone, the interview is excerpted below.

How does the program work?

There are two incentives that we’re offering. Now, the first one you mentioned, the student loan repayments, and its up to fifteen thousand dollars paid out over five years to move to these areas, and the other incentive is a waiver for an individual’s Kansas state income tax liability for up to five years.

Now, these areas have been losing population for years. The census says 77 of the state’s 105 counties lost residents between 2000 and 2010. This program, we should say, is only available in certain counties. In those counties, what does the economic picture look like?

We selected fifty counties for this program, and when I say we, I mean the Kansas legislature did, and we picked counties that had lost approximately ten percent of their population since the last census. Many of these counties, their economies are based on agriculture and manufacturing, and as the productivity in agriculture increased, fewer people were required to produce a certain level of output. That led to some population loss, but many of the people leaving are younger people, sometimes due to the perception that there aren’t the professional opportunities in the region and that there will be more available in urban areas.

Are there enough professional jobs to lure college grads to begin with?

Many of the economic development directors in many of these counties will consistently say that they have job openings but not the people to fill them. Since we launched the program last year–we published the application on July 1–we’ve received 383 applications and people have started moving into these regions, and the majority of them are working in education, healthcare, lawyers, accountants — a very diverse cross-section of professional positions.

The tax exemption part of this program will cost the state about $1.5 million in its first year. If the state is struggling, can Kansas afford to do this?

We believe that we can. We believe that the number of people we bring in will offset the costs through increased revenues. And in fact, that state’s been very aggressive in pursuing low tax policies that would lead to growth. The ROZ program was the first step in doing that. For these small towns it’s hard to overstate the impact that a new physician or a new young family with children would mean to that community. It increases enrollment at school and many other factors.

Guest:

  • Chris Harris, program manager of the Kansas rural opportunity zone

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