Addressing Student Loan Debt as a Barrier to Vermont Residency

Evaluating Sections of Vermont Senate Bill 331
PRS Briefs
PRS Policy Brief 1920-11
Friday, June 12, 2020

Vermont currently has an aging population and is experiencing more out-migration than in-migration. The Federal Reserve recently found that the largest barrier for young professionals staying in and moving to rural areas is the burden of student debt. In S. 331, the state legislature proposes new programs to offset the burden of student loan debt in order to both retain Vermonters and attract new workers who are burdened with student loan debt. In designing such programs, legislators may wish to consider the successes and failures of similar programs across the country. This report provides background on the population and economy of Vermont, existing student loan payment assistance programs in Vermont, and national trends in state student loan assistance programs. The report analyzes select components of the current version of the bill—specifically the employer student loan payment program and the expansion of 529 plan uses. It compares the proposed programs to those in Connecticut and Maine to show the differences and similarities that exist among programs in these states. The paper closes with a general summary of findings and presents some policy options for the Vermont State Legislature to consider in its deliberations regarding the future of student loan debt repayment as a barrier to Vermont residency.