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COLCHESTER, Vt. — Mohamud Diini’s office is bare but for a single plant and posters of the Boston Celtics and the college in nearby Burlington from which he graduated in the spring.
“I did not want to stay in Vermont,” said the son of Somali immigrants who was brought to New England as a child and never got used to the cold winters.
Diini planned to bolt for somewhere warmer after he graduated from Champlain College. But there was one thing in Vermont that pulled him back: a new program that is paying him $2,500 a year toward the $20,000 of student loans he owes as long as he stays and works in the state for at least two years.
“I was, like, hey, why not stay” in Vermont? said Diini, 23, who is working as an accountant. “Maybe the two years can turn into five years” or even “turn into forever.”
That’s exactly what lawmakers behind the student loan repayment program hope. So do their counterparts in other states with aging populations and worker shortages, who are dangling incentives of as much as $100,000 toward paying off the student loan debt of college graduates if they agree to stay.
“Generally, there is a massive shortage of talent, particularly in certain skilled talent areas,” said Jamie Kohn, senior research director for the human resources practice of the Gartner consulting firm, who said competition for college graduates is fierce. “Student loan repayment may be a way for states to mitigate some of the loss of wage growth that people are feeling” so they not only stay, but can afford to start families and buy houses.
States that need young and educated workers are stepping into the breach.
“From the states’ perspective, if they want people in the state to stay and have kids, reducing debt is going to help people make that decision,” said Arielle Kuperberg, an associate professor of sociology at the University of North Carolina at Greensboro and co-author of a study about how student loan debt affects behavior.
At least 42 states have enacted student loan repayment or forgiveness programs since 2018, according to the National Conference of State Legislatures. Almost all of them are for professionals in specific areas of shortages — mostly teaching and healthcare — or who agree to work in underserved areas.
This story was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Additional reporting by Liam Elder-Connors.
