Indiana has long suffered from “brain drain”–we have great universities that draw very bright students from around the country (and increasingly, the world), but we don’t keep many of them. In fact, the higher a student’s level of education, the more likely the student is to move away from the state after graduation.
Only about 16 percent of PhD recipients remain in Indiana’s workforce one year after graduation.
There are various reasons advanced for this situation; the nature of Indiana’s job market, the attractions of urban life (with few exceptions, Indiana is a pretty rural state), and the relative absence of other college graduates.
We aren’t the only state with this problem. Michigan, for example, is in a similar situation, and a Michigan legislator has proposed an interesting “fix.”
State Sen. Glenn Anderson, D-Westland, recently introduced SB 408, which offers a tax credit to recent college graduates who choose to stay and work in Michigan. This legislation will make it possible for talented young professionals to earn their livelihood in the state by easing the burden of student debt. The bill offers a tax credit to recent graduates who remain in state that lowers annual payments on student loans.
Student loan debt is increasingly seen as a drag on economic growth, as well as a burden on the indebted individuals. A young person who has to divert a significant percentage of her disposable income to loan repayment isn’t buying a new stove or car or house.
I don’t know whether the numbers in Senator Anderson’s proposal are the right ones, and there may be downsides to his proposal that aren’t immediately apparent.
A tax credit might not be enough to keep graduates in Hoosier cornfields. But it’s an intriguing idea.