Using loan relief to attract graduates will not provide a long-term solution
Published: Thursday, June 28, 2012
Updated: Thursday, June 28, 2012 09:06
Paying off debt may be enough to bring fresh faces to a city or corporation, but it is not enough to keep them there.
According to the Huffington Post, the average student accumulates $25,250 of loan debt over the course of his or her college career. With such a tremendous amount of money to pay in a limited amount of time, graduates are desperately seeking relief.
Many cities, such as Niagara Falls, N.Y., offer graduates up to $3,500 for two years to help ease their student debt in exchange for renting an apartment or buying a home within a targeted area.
Though these programs provide short-term benefits to students and cities, they are not worth the eventual long-term population loss that accompanies them.
The opportunistic endeavor, though seemingly beneficial, only serves as an antibiotic — one that attempts to ease the epidemic of population loss.
But the brain drain is nothing new for Niagara Falls. According to data by the U.S. Census Bureau, the city’s population has suffered a 9.8 percent decrease in the last decade alone. What could possibly lead to such a drastic decline over a ten-year period? After all, the city is a tourist attraction.
Shockingly, the median age of a resident dwelling in the city is approximately39, and the community is mostly rural, which is not very enticing to young college graduates.
Niagara Falls attempts to lure former college students into the city by paying off their loans for two years in hopes that they will pay rent faithfully.
According to Bloomberg Businessweek, Niagara Falls has the seventh strongest job market in the nation, so graduates would not have a problem seeking employment. The fields of manufacturing, finance, leisure and hospitality are all likely to hire.
It is certainly an attractive offer. College graduates receive incentive for all of their hard work, and Niagara Falls stimulates its economy in the process — a win-win situation. Students already living in the Niagara Falls area also benefit from the program, conveniently residing near home while being independent.
But what happens after two years when these graduates seek higher paying jobs and want to move to urban cities or back home with their parents to pay off the remainder of their loans? What if they would like to seek a career instead of compromising potential for convenience?
Niagara Falls is practically asking graduates to play the system. Ideally, a graduate would stay for two years, get $7,000 of their debt paid and leave. Yet, the city has to bring something else to the table to keep graduates intrigued. Merely paying off loans to stimulate the economy is a temporary fix — not a permanent solution.
Using student debts as an opportunity to stimulate the economy could be, in the long run, harmful. Similar programs should not be executed without proper evidence that they are indeed beneficial for everyone involved, both long-term and short-term.