Facing an aging population and workforce shortages in high-demand fields, a number of states are trying to attract younger workers with college degrees by offering to help them pay off their student loans, according to The Hechinger Report. The number of Americans 65 and older has risen by 34% since 2010, outpacing the number of young people entering the workforce, according to the Census Bureau.
Offers of student loan forgiveness appeal to graduates increasingly concerned about student debt, especially with the October restart of federal student loan payments. Fifty-six percent of students in the college Class of 2024 surveyed by the virtual recruiting company Handshake expect to have student loan debt upon graduation, and 69% said that debt will affect their career choices after they graduate.
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Paid to stay
Recognizing these concerns—and hoping to increase recent graduates’ ability to make purchases, such as buying a house, that they would not be able to manage without loan forgiveness—47 states and Washington, DC, have created student loan forgiveness or repayment programs to bring in college grads to live there and work in high demand fields, USA Today reported this spring. These programs often have more bipartisan support than blanket debt forgiveness, as many target specific fields with high need, experts tell The Hechinger Report.
Unlike the federal government’s Public Loan Forgiveness Program, which requires graduates in public service to stay in their jobs for 10 years before receiving full federal loan forgiveness, states’ repayment and forgiveness programs often have a shorter time horizon and are accessible to graduates across a variety of careers, such as pathology, engineering, finance, social work, and firefighting.
Plans include Maryland’s seven programs, one of which offers up to $20,000 in mortgage assistance, to help qualified homebuyers pay off student loans. Other programs, such as those in Kansas, Utah, and South Carolina, provide thousands of dollars in loan forgiveness for teachers and medical professionals who work with underserved populations in rural communities for a minimum of one to three years.
Maine and Vermont, which have the oldest and third-oldest populations, respectively, by median age in the country, are also forgiving student loans for anyone who stays and works in their states. College mergers and closures in Vermont have narrowed pathways for young people to come to the state. To mitigate this loss in younger workers, Vermont collaboratively launched the Green Mountain Job and Retention Program this spring, which offers up to $5,000 a year in student loan repayments for new bachelor’s degree recipients from Vermont colleges and universities, as long as they agree to stay and work in the state for at least two years, no matter their profession.
To attract young people to live and work in Maine, the state last year expanded its Student Loan Repayment Tax Credit, which provides individuals who graduated college after Dec. 31, 2007, and live and work in Maine with an annual refundable tax credit of up to $2,500, with a lifetime cap of $25,000. This year, nearly 14,000 Maine residents claimed tax credits toward their student loan repayments—totaling $31.4 million—according to the state’s Department of Economic and Community Development.
“This is not a panacea. It’s not like people are going to flood to Maine because they’re going to get $2,500 a year,” Maine state Senator Matthew Pouliot tells The Hechinger Report. “But it is a chance to come and see the long-term benefit of staying.”