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Policy Library

Attract Graduates to Communities Facing “Brain Drain” with the Kickstart Communities Loan Forgiveness Act

In too many communities, when young people go off to college, they struggle to move back home because there simply are not enough job opportunities to make it possible to build a life, especially since they are carrying the crushing cost of student loan debt. This “brain drain” is part of a cycle of population and opportunity loss for these areas. By offering two years of college loan forgiveness to graduates who locate in areas experiencing population loss or fill job openings in high-need fields, states can reverse the cycle: attracting college graduates, while relieving student loan burdens.

The National Landscape

Introduced in:

Maine, New Hampshire, New York

In The News

“[Trevor] Elkins [Newburgh Heights Mayor] says the goal [of the program] is to allow the village to recover from a 40-year decline in population.'We wanted to find a way that we could help students but also address some of our local, immediate problems that we have with a shrinking tax base and an aging population.'”
“[Lee Waldron, director of Enrollment Operations at Tabor College, who participated in a loan repayment program in rural Kansas said] "I could see this being something they could build on in the future," he said. "What it does for the county itself is it bring a quality individual, and their family perhaps if they're married, to the town, with the hopes that person will establish roots there, will buy a home, purchase vehicles, allow their income to flow into the community."”
“A year out of medical school, [new dentist Bryan Ruiz] thought it would take decades to pay off the debt, particularly since he had accepted a less lucrative position at a community health clinic that primarily serves low-income Medi-Cal patients. ‘This really is life-changing,’ he said. California’s program is aimed at increasing the number of doctors who see Medi-Cal patients in a state experiencing a shortage of healthcare providers.”

Partners

  • Business and small business advocates, especially in rural areas
  • Localities experiencing population loss
  • Students and families
  • Consumer advocates
  • Employers
  • Education advocates

Opposition

  • Some for-profit lenders and loan servicers
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FAQ

Who does this help?
This helps everyone by increasing the tax base and the influx of college graduates into the state. It helps students and families with loan repayment and particularly targets communities experiencing population loss or a shortage of skilled workers.
Is this high cost to the state?
Every state has different needs and this bill allows states to create a targeted loan forgiveness program that’s right for them. To build a program that is cost-effective and able to provide long-term economic benefits based on in-state needs, States can choose the size and targeting of the program by geography, type of population loss, or the skill graduates will bring to the state.
How does this work?
Targeted loan forgiveness entices graduates to live in areas facing population loss or a shortage of certain skills workers by providing student loan forgiveness when graduates choose to locate in these areas or fill those jobs. These areas get an economic boost from the influx of higher-skilled workers and an increased number of young people living and raising families there. Graduates get help affording the costs of college, and communities are better equipped to grow economically.
Print

Model Policy

SECTION 1 (TITLE):
This act shall be known as the Targeted Student Loan Forgiveness Act.

SECTION 2 (PURPOSE):
To alleviate the burden of student loan debt and attract qualified workers to parts of STATE experiencing population loss or a shortage of skilled workers

SECTION 3 (PROVISIONS):

(a) To be eligible for a loan forgiveness award under this section, an applicant shall:
  • (i) have graduated from high school or obtained a high school equivalency diploma;
  • (ii) have graduated and obtained an undergraduate degree from a college or university and apply for this program within five years of obtaining such degree;
  • (iii) be a participant in a federal income-driven repayment plan;
  • (iv) reside and work in [STATE], if employed; and
  • (v) meet all requirements described in part (b) below.

(b) By January 1 each year, DEPARTMENT shall publish a list of counties and localities in STATE where residents shall be eligible for this program. The list shall include criteria designated by the legislature as a prerequisite for eligibility. The criteria used to determine eligibility may include:
  • (i) [residing in a county that experienced a seven year net population decline over the closest prior seven year period for which information is available;]
  • (ii) [residing in a county that experienced the highest net population loss in STATE over the most recent ten year period for which information is available;]
  • (iii) [entering into a high-need field designated by the legislature, including but not limited to teaching, nursing, dentistry or primary care in rural or underserved communities, or other fields experiencing a shortage of qualified applicants;]
  • (iv) [any reasonable qualification the legislature deems necessary to effectuate the purposes of this bill.]

(c) DEPARTMENT shall assist counties to publicize this program to potential applicants.

(d) An applicant whose annual income is less than fifty thousand dollars shall be eligible to receive an award equal to one hundred percent of his or her monthly federal income-driven repayment plan payments for [twenty-four months] of repayment under the federal program. Provided, however, that the awards granted under this section shall be deferred for a recipient who has been granted a deferment or forbearance under the federal income-driven repayment plan. Upon completion of such deferment or forbearance period, such recipient shall be eligible to receive an award for the remaining time period under this subdivision.
  • (i) A recipient who is not a resident of an eligible county or locality or otherwise does not meet the eligibility criteria established under (b) above at the time a payment is made under this section shall be required to refund such payments to the state. The corporation shall be authorized to recover such payments in accordance with rules and regulations promulgated by the corporation.
  • (ii) An applicant who is delinquent or in default on a student loan made under any STATE or federal education loan program or has failed to comply with the terms of a service condition imposed by an award made pursuant to this article or has failed to repay an award shall be ineligible to receive an award under this program until such delinquency, default or failure is cured.

(e) DEPARTMENT is authorized to promulgate rules and regulations, and may promulgate emergency regulations necessary for the implementation of the provisions of this section.