Communities all around the United States, concerned with the long-term effects of an aging population and a steady decline in inhabitants, are trying something a little different this year to generate positive change. Some towns and cities are offering financial incentive packages, such as a reduction in taxes or cash toward student loans, to recent graduates in the hopes they will choose to live within certain designated areas. This innovative program is an effort to possibly breathe new air into otherwise inactive neighborhoods.
Ninety-four percent of college graduates currently carry substantial student loan debt of some kind, requiring monthly payments upon graduation. In 2010, more than $100 million was borrowed in order to pay for higher education, pushing total outstanding student loan debt to more than $1 trillion this year. A challenging economy and competitive job market have made repayment of these loans more difficult for a high percentage of people. A financial incentive might be an answer for some young professionals in need of a boost.
New York Adds Incentives
In an effort to attract a younger generation of educated, motivated people to their cities, communities in New York and Kansas are currently offering recent college graduates a jump start on their futures.
The town of Niagara Falls, N.Y., for example, has recently set aside $200,000 to help attract a younger crowd to its declining downtown.
Over the past 50 years, the town of approximately 50,000 people has lost half of its population. Niagara Falls Director of Community Development Seth Piccirillo said the town can’t afford to lose any more people. In fact, if Niagara Falls comes in under 50,000 people by the next census, city officials fear they will lose federal assistance opportunities. The director said he hopes to grow Niagara Falls’ population base by enticing young professionals to live downtown, as they ultimately are key to creating a modern economy.
Graduates who have earned a two- or four-year degree within the past two years may request up to $3,500 per year through the Niagara Falls program (for two years) to be paid toward outstanding student loans. This offer has also been extended to graduate students. While Niagara University and Niagara County Community College graduates will have first dibs on the program, the city plans to solicit graduates from all over the country. In order to qualify, applicants would have to rent or purchase an apartment or house within the downtown area.
Piccirillo hopes the recruited residents will be able to fix up their new community and give it the renewed life it needs.
Kansas Offers Two Incentive Packages
Fifty counties in Kansas are working on a similar concept, in hopes of enticing young residents through the establishment of Rural Opportunity Zones (ROZs). The program offers two monetary incentives to new, full-time inhabitants: income tax waivers for up to five years and/or student loan repayments up to $15,000.
To qualify for student debt repayment, residents must hold an associate’s, bachelor’s or post-graduate degree, have a loan balance and settle in one of the ROZ counties.
The manager of the Kansas program, Chris Harris, has received hundreds of applications so far, with a third of them being from people from out state. Approximately 75 percent of the applicants qualify for one or both of the incentive packages.
Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].
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