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Rural America's “brain drain”: How student debt is emptying small towns

77 points by SQL2219 8y ago

rahimnathwani 8y ago
More years of education => More student debt More years of education => Higher likelihood to get a city job that pays well enough for a decent lifestyle The above can explain the correlation between existence/level of student debt, and the likelihood of moving from rural to urban areas. I don't see why we would assume student loans are the cause. EDIT: The report on which this article is based presents the correlation, but is explicit about not suggesting causation: "Importantly, we have not determined whether the relationship between loan balances and borrowers’ migration patterns is causal—for example, if, in order to repay their loans, high-balance borrowers seek higher wages in metropolitan areas. Instead, we may be observing the effects of factors correlated with loan balances, but not included in the CCP. These may include factors such as family income, degree completion, school selection, or the pursuit of an advanced degree."
- bayesian_horse 8y ago
  The student loans may force you to choose a city job instead of one in a rural area, even if you otherwise wanted to move back to your home town...
- usrusr 8y ago
  Sure, education is draining rural areas even without student loans, but they make the problem worse. And this effect is even more pronounced when we move focus one level of urbanization higher: Truly rural areas just don't have that many highly qualified positions outside the medical field. But in their regional capitals, definitely not what you would call a town anymore, every position exists that you would also finds in a world class metropolis, just on a much lower payscale. That's where much of the education-caused movement would go in absence of student debt. But when you add debt to the equation, the lure of first tier metropolis money turns from "but on the other hand, cost of living etc" to an offer you cannot reject.
  - rahimnathwani 8y ago
    Your explanation is plausible, but people early in their career are always short of money, with or without student loans: Need to save a large down payment to buy a home => Better to move to the city where I can save more $$ each year Need to pay down a large student debt => Better to move to the city where I can pay down more $$ of my debt each year I'm not disagreeing with you: student debts make the hole larger, so strengthen the effect. But the effect is large in any case (due to most of us being born with a 'short position' on housing).
torstenvl 8y ago
The article is restrained in its conclusions, but it seems obvious - anecdotally - that it's causal. There is no cost of living adjustment for student loans. They don't cost less if you live in Indiana than if you live in Manhattan. Even income-based repayment only helps so much. If you really want your student loan payments to be a smaller proportion of your income, you need a higher-paying job. As an example in my field, law school cost of attendance is approaching $100,000/year. People are graduating with almost a quarter million dollars in debt. That leaves almost no choice between a small town Midwestern law firm paying $40,000 indefinitely, and a Vault 100 firm paying $160,000 (or higher!) with guaranteed lockstep raises every year. Sure. Some of those people would have competed for BIGLAW jobs before. But student loan debt is dispositive.
- cm2187 8y ago
  I have mixed feeling on that. In the UK I understand that the repayment of the student loan is conditional to resources. Then I think it’s not too bad as effectively you end up paying for the studies you get the benefit from, rather than making others pay for your studies. And if you don’t get the benefit, then the cost becomes socialised. But on the other hand the people who have to make these decisions are 17 or 18 year old kids. Some of these kids will be impressively mature, most will not. Then it becomes a function of how well their parents know their way around the system and high tuition fees create a big hurdle. Then you get social selection and it’s counterproductive.
  - TheOtherHobbes 8y ago
    By definition the only people who need loans are the people who can't afford them. They have to take a gamble on their own learning and earning skills and the future state of the economy - the latter being something they have no control over, and realistically, no understanding of. The reality is the system will collapse anyway within the next ten years, probably with significant economic wreckage, and the next generations will wonder why anyone ever thought it was a good idea. Is social selection an unfortunate byproduct, or a deliberate goal?
- beambot 8y ago
manfredo 8y ago
Is student debt the culprit? Or is it just the greater trend of urbanization that has been happening for literally centuries? I'm not using the word literally as a means of emphasis here, the globe has on average been becoming more urban since the agricultural revolution. Overall, population centers are more economically productive. You have more people collected in a smaller space, so workers and industries can cooperate more effectively. Countries' levels of urbanization have and, to varying degrees, continue to have a strong correlation with their level of wealth. You have more goods and services available within a smaller area. Workers have more job opportunities. Urbanization also has good environmental effects. It makes cleaner modes of transport, like trains and subways, much more feasible. Power and water has to travel a smaller distance (except for when people put cities in dumb locations with regards to water distribution, like LA). Dense countries tend to have a smaller carbon footprint compared to more rural countries with the same standards of living. Basically, there's a lot to be gained by populations shifting from rural areas to the city. I'm not so sure why many are so eager to lament a shrinking rural population.
- dtech 8y ago
  > Is student debt the culprit? It's not. The same trend can be seen all over Europe, where student debt is a much smaller issue.
  - TulliusCicero 8y ago
    As an American in Germany, small towns here seem a lot healthier to me. Maybe it's just tourist-vision, or that most of the ones I've been to are in Bavaria (which is doing very well economically), but they look and feel quite vibrant. Personally, I think part of this is that they're urbanist in a way that US small towns almost never are: even cities of 5 or 10 or 20k here are highly walkable, moreso than US cities 10x the population size, with cute downtowns to boot.
    - cheschire 8y ago
      A lot of the vibrant small villages and towns in rural Germany are struggling. Healthcare is a huge problem, for example, and there are attempts at solving the problem with mobile clinics but that's only fixing a symptom. Commuting is another issue as a lot of unskilled labor is put out of business by the larger businesses who can undercut them on prices. For example a local corner store may go out of business because they cannot purchase in bulk due to the small population, so an Aldi moves in 2 towns away, puts all the corner stores within a 10km radius out of business, and now all those employees have to compete for limited positions AND commute on top of that.
CalRobert 8y ago
It seems like even when we have enormous wealth as a whole, we've decided that it's an aberration to be free of enormous obligations when starting life. I doubt it was any sort of evil machination, but it sure has been handy for already pretty-well-off people. The person who starts life off in massive debt, or who knows they'll be homeless if they don't somehow come up with a pile of hundred-dollar-bills every month, or (as is often the case) both, is somebody who: * doesn't write for leisure * doesn't organize politically * doesn't innovate except on things they get paid to research * and (perhaps most importantly) doesn't start a competing company. These are on average, of course. A few people will still manage to do those things (especially if they come from wealth) but on the whole such activity is reduced. God help you if you have a kid and want to, say, run for office. How do you plan to pay for childcare? Meanwhile, they are a person who will work on the things incumbent holders of power (owners of large businesses) want them to work on, for the sake of enriching 1) those owners, 2) landlords, 3) People who bought houses decades ago. The system of entirely manufactured housing shortages and crushing student debt is pretty handy for keeping your population doing just what you want it to do. I think a lot of people would actually be better off starting life with nothing and living somewhere cheap rather than starting with -$50,000+ and a huge rent bill every month. After all, we have the internet. But too many people don't discover this until it's too late, and they are shackled with a lifetime of obligations. I was lucky to graduate without student debt largely thanks to my parents. My wife was not. I have been far, far more free in my choices in life, including the choice to live somewhere cheap, than her.
- zozbot123 8y ago
  Rural America doesn't have "enormous wealth". (To be fair, it doesn't have a "housing shortage" problem, either!) > I think a lot of people would actually be better off starting life with nothing and living somewhere cheap The question is how to do this while working in your preferred sector. It's not just the tech industry that seems tied to the sort of agglomeration economies you only get in big urbanized areas; large parts of the service sector are like this, too.
  - CalRobert 8y ago
pickpuck 8y ago
If remote work became ubiquitous, wouldn’t this be less of an issue? Or would employers just factor in location?
- kkarakk 8y ago
  remote services are already offering less pay to employees in countries with a lower standard of living. instead of lifting talented people up it's just adding to the sense of stagnation. the only options to get a "good life" are higher education or lucking into a job(i say luck coz the competition is fierce in any developing country) that pays for your immigration
bellerose 8y ago
I think student loans factor into the equation. Although, it certainly isn’t just student loans being the problem. Cost of homes are making ownership unattainable, with the student loans making the lenders refuse to offer a mortgage. My parents era had an extra surplus of homes built and where cost of renting was low with middle class homes needing to be sold. It appears someone had the bright idea to limit construction for the requirements of the next generation and all the previous owners now hold market power or it simply just happened by an over increasing population. Rent has gone up everywhere and it doesn’t matter where you’re located. The US government created unnecessary debt by the war in Iraq; where public funding changed hands to pay for the war. The banking crisis in 09 was bailed out by the government unnecessarily. The economy crashes as a result of many factors including this. Universities constantly increasing tuition, the motto college is required becomes a reality and where the entry degrees are now similar to holding a high school diploma. Also why not throw in the debt inducing cost of healthcare if an emergency happens where a service of saving your life can ruin it. The millennials are resentful of the previous generation throwing their futures away, letting it all happen and knowing social security benefits are drying up as well. The whole thing is a cluster fuck and where some people are okay making a divide by expressing its not necessarily bad. Basically there is a lot of arrogance towards self admiration if you’re doing alright or had parents take the bill. The previous generations didn’t approach their circumstances like that from my understanding. I think my generation is either narcissistic or deluded by excess Facebook, Netflix, who has an android vs an iPhone and other nonsense resulting in loss of the big picture being quality of life. A lot of social conditioning helped the con.
renholder 8y ago
The article doesn't address a trend that I've noticed: You can't connect two trees together in the woods and make them talk. A lot of rural areas in the states owe their livelihoods, at least large swaths of it in the past, to other industries like oil or agriculture or the like. They are very "stuck in their ways", as the colloquialism goes, and seem loathed to adapt to the times - for varying and differing reasons. Depending on the typical political demographics of an area, this will also lend to whether or not there's public services available to incentivise people to move and/or live there - such a bus or train systems. (This also disincentivises the poor but that's a different soapbox for another day.) Large cities, in their parts, offer public services that rural areas (in the states) simply do not - the availability and viability of employment removed. If I were paying off a student loan debt, of course the higher wage[s] with the public services incentives are going to be more appealing. I don't have to own a car to get to work? Great! That's far less overhead that I have to deal with and allows more - theoretical - buffer cushion of assets to pay-off my loan[s] and/or live a comfortable life. This, of course, is discounting the simple fact that college loans have, themselves, grown disproportionately larger (compared to previous generations') and this is in large part due to the fact that universities can keep increasing the costs, indefinitely, because a college degree is no longer a commodity but a necessity for a lot of positions (experience can trump a degree in our field but this trend is decreasing). Not only this but because the loans are guaranteed by the government, the universities are getting paid - no matter what. I would expect, in the next 10 years, for people to start hitting $1M for their overall loans, simply because it's a choice between two perceived "evils": Debt and a "guaranteed future" or no debt and a perceived endless cycle of poverty. (Yes, I'm aware of trade skills and I'm not arguing for or against them, here, just noting that they are, for a large part, ignored in overall society.) I don't an answer to the problem but I can tell you that it's not a simple as student loan debt, when it comes to brain drain of rural areas. There are many other factors at play, the least of which (for our field), is that you can't work somewhere where the jobs simply do not exist. Someone would say "then make the jobs" but it is nowhere near that simple; especially, in rural America, where the proliferation of technology is still a remote possibility. For example, there are states that are so invested in other industries that they depend on the IX of other states (e.g.: Louisiana routing through SN) because they refuse to invest in building in the infrastructure in their own states. That's a reality that will, seemingly, never be addressed because it's the status quo.
RickJWagner 8y ago
"To be sure, the Federal Reserve said it couldn't determine whether the student loan debt is causing young college grads to move to cities." Of course not. Since time began, kids have moving to where higher paying jobs are found. CBS is too blatant in trying to catapult 'student loan debt' into the headlines.
swoongoonz 8y ago
I would argue it's not just rural America, it's also smaller markets and cities. Cities like Salt Lake City, Sacramento, Nashville, Omaha, and Portland (OR), can't compete with the larger markets. If you have enough skills, you aren't going to stay in those markets long before a recruiter from the major cities reach out.

77 points by SQL2219 8y ago

More years of education => More student debt More years of education => Higher likelihood to get a city job that pays well enough for a decent lifestyle The above can explain the correlation between existence/level of student debt, and the likelihood of moving from rural to urban areas. I don't see why we would assume student loans are the cause. EDIT: The report on which this article is based presents the correlation, but is explicit about not suggesting causation: "Importantly, we have not determined whether the relationship between loan balances and borrowers’ migration patterns is causal—for example, if, in order to repay their loans, high-balance borrowers seek higher wages in metropolitan areas. Instead, we may be observing the effects of factors correlated with loan balances, but not included in the CCP. These may include factors such as family income, degree completion, school selection, or the pursuit of an advanced degree."

bayesian_horse 8y ago
The student loans may force you to choose a city job instead of one in a rural area, even if you otherwise wanted to move back to your home town...
usrusr 8y ago
Sure, education is draining rural areas even without student loans, but they make the problem worse. And this effect is even more pronounced when we move focus one level of urbanization higher: Truly rural areas just don't have that many highly qualified positions outside the medical field. But in their regional capitals, definitely not what you would call a town anymore, every position exists that you would also finds in a world class metropolis, just on a much lower payscale. That's where much of the education-caused movement would go in absence of student debt. But when you add debt to the equation, the lure of first tier metropolis money turns from "but on the other hand, cost of living etc" to an offer you cannot reject.
- rahimnathwani 8y ago
  Your explanation is plausible, but people early in their career are always short of money, with or without student loans: Need to save a large down payment to buy a home => Better to move to the city where I can save more $$ each year Need to pay down a large student debt => Better to move to the city where I can pay down more $$ of my debt each year I'm not disagreeing with you: student debts make the hole larger, so strengthen the effect. But the effect is large in any case (due to most of us being born with a 'short position' on housing).

torstenvl 8y ago

The article is restrained in its conclusions, but it seems obvious - anecdotally - that it's causal. There is no cost of living adjustment for student loans. They don't cost less if you live in Indiana than if you live in Manhattan. Even income-based repayment only helps so much. If you really want your student loan payments to be a smaller proportion of your income, you need a higher-paying job. As an example in my field, law school cost of attendance is approaching $100,000/year. People are graduating with almost a quarter million dollars in debt. That leaves almost no choice between a small town Midwestern law firm paying $40,000 indefinitely, and a Vault 100 firm paying $160,000 (or higher!) with guaranteed lockstep raises every year. Sure. Some of those people would have competed for BIGLAW jobs before. But student loan debt is dispositive.

cm2187 8y ago
I have mixed feeling on that. In the UK I understand that the repayment of the student loan is conditional to resources. Then I think it’s not too bad as effectively you end up paying for the studies you get the benefit from, rather than making others pay for your studies. And if you don’t get the benefit, then the cost becomes socialised. But on the other hand the people who have to make these decisions are 17 or 18 year old kids. Some of these kids will be impressively mature, most will not. Then it becomes a function of how well their parents know their way around the system and high tuition fees create a big hurdle. Then you get social selection and it’s counterproductive.
- TheOtherHobbes 8y ago
  By definition the only people who need loans are the people who can't afford them. They have to take a gamble on their own learning and earning skills and the future state of the economy - the latter being something they have no control over, and realistically, no understanding of. The reality is the system will collapse anyway within the next ten years, probably with significant economic wreckage, and the next generations will wonder why anyone ever thought it was a good idea. Is social selection an unfortunate byproduct, or a deliberate goal?
beambot 8y ago

manfredo 8y ago

Is student debt the culprit? Or is it just the greater trend of urbanization that has been happening for literally centuries? I'm not using the word literally as a means of emphasis here, the globe has on average been becoming more urban since the agricultural revolution. Overall, population centers are more economically productive. You have more people collected in a smaller space, so workers and industries can cooperate more effectively. Countries' levels of urbanization have and, to varying degrees, continue to have a strong correlation with their level of wealth. You have more goods and services available within a smaller area. Workers have more job opportunities. Urbanization also has good environmental effects. It makes cleaner modes of transport, like trains and subways, much more feasible. Power and water has to travel a smaller distance (except for when people put cities in dumb locations with regards to water distribution, like LA). Dense countries tend to have a smaller carbon footprint compared to more rural countries with the same standards of living. Basically, there's a lot to be gained by populations shifting from rural areas to the city. I'm not so sure why many are so eager to lament a shrinking rural population.

dtech 8y ago
> Is student debt the culprit? It's not. The same trend can be seen all over Europe, where student debt is a much smaller issue.
- TulliusCicero 8y ago
  As an American in Germany, small towns here seem a lot healthier to me. Maybe it's just tourist-vision, or that most of the ones I've been to are in Bavaria (which is doing very well economically), but they look and feel quite vibrant. Personally, I think part of this is that they're urbanist in a way that US small towns almost never are: even cities of 5 or 10 or 20k here are highly walkable, moreso than US cities 10x the population size, with cute downtowns to boot.
  - cheschire 8y ago
    A lot of the vibrant small villages and towns in rural Germany are struggling. Healthcare is a huge problem, for example, and there are attempts at solving the problem with mobile clinics but that's only fixing a symptom. Commuting is another issue as a lot of unskilled labor is put out of business by the larger businesses who can undercut them on prices. For example a local corner store may go out of business because they cannot purchase in bulk due to the small population, so an Aldi moves in 2 towns away, puts all the corner stores within a 10km radius out of business, and now all those employees have to compete for limited positions AND commute on top of that.

CalRobert 8y ago

It seems like even when we have enormous wealth as a whole, we've decided that it's an aberration to be free of enormous obligations when starting life. I doubt it was any sort of evil machination, but it sure has been handy for already pretty-well-off people. The person who starts life off in massive debt, or who knows they'll be homeless if they don't somehow come up with a pile of hundred-dollar-bills every month, or (as is often the case) both, is somebody who: * doesn't write for leisure * doesn't organize politically * doesn't innovate except on things they get paid to research * and (perhaps most importantly) doesn't start a competing company. These are on average, of course. A few people will still manage to do those things (especially if they come from wealth) but on the whole such activity is reduced. God help you if you have a kid and want to, say, run for office. How do you plan to pay for childcare? Meanwhile, they are a person who will work on the things incumbent holders of power (owners of large businesses) want them to work on, for the sake of enriching 1) those owners, 2) landlords, 3) People who bought houses decades ago. The system of entirely manufactured housing shortages and crushing student debt is pretty handy for keeping your population doing just what you want it to do. I think a lot of people would actually be better off starting life with nothing and living somewhere cheap rather than starting with -$50,000+ and a huge rent bill every month. After all, we have the internet. But too many people don't discover this until it's too late, and they are shackled with a lifetime of obligations. I was lucky to graduate without student debt largely thanks to my parents. My wife was not. I have been far, far more free in my choices in life, including the choice to live somewhere cheap, than her.

zozbot123 8y ago
Rural America doesn't have "enormous wealth". (To be fair, it doesn't have a "housing shortage" problem, either!) > I think a lot of people would actually be better off starting life with nothing and living somewhere cheap The question is how to do this while working in your preferred sector. It's not just the tech industry that seems tied to the sort of agglomeration economies you only get in big urbanized areas; large parts of the service sector are like this, too.
- CalRobert 8y ago

pickpuck 8y ago

If remote work became ubiquitous, wouldn’t this be less of an issue? Or would employers just factor in location?

kkarakk 8y ago
remote services are already offering less pay to employees in countries with a lower standard of living. instead of lifting talented people up it's just adding to the sense of stagnation. the only options to get a "good life" are higher education or lucking into a job(i say luck coz the competition is fierce in any developing country) that pays for your immigration

bellerose 8y ago

I think student loans factor into the equation. Although, it certainly isn’t just student loans being the problem. Cost of homes are making ownership unattainable, with the student loans making the lenders refuse to offer a mortgage. My parents era had an extra surplus of homes built and where cost of renting was low with middle class homes needing to be sold. It appears someone had the bright idea to limit construction for the requirements of the next generation and all the previous owners now hold market power or it simply just happened by an over increasing population. Rent has gone up everywhere and it doesn’t matter where you’re located. The US government created unnecessary debt by the war in Iraq; where public funding changed hands to pay for the war. The banking crisis in 09 was bailed out by the government unnecessarily. The economy crashes as a result of many factors including this. Universities constantly increasing tuition, the motto college is required becomes a reality and where the entry degrees are now similar to holding a high school diploma. Also why not throw in the debt inducing cost of healthcare if an emergency happens where a service of saving your life can ruin it. The millennials are resentful of the previous generation throwing their futures away, letting it all happen and knowing social security benefits are drying up as well. The whole thing is a cluster fuck and where some people are okay making a divide by expressing its not necessarily bad. Basically there is a lot of arrogance towards self admiration if you’re doing alright or had parents take the bill. The previous generations didn’t approach their circumstances like that from my understanding. I think my generation is either narcissistic or deluded by excess Facebook, Netflix, who has an android vs an iPhone and other nonsense resulting in loss of the big picture being quality of life. A lot of social conditioning helped the con.

renholder 8y ago

The article doesn't address a trend that I've noticed: You can't connect two trees together in the woods and make them talk. A lot of rural areas in the states owe their livelihoods, at least large swaths of it in the past, to other industries like oil or agriculture or the like. They are very "stuck in their ways", as the colloquialism goes, and seem loathed to adapt to the times - for varying and differing reasons. Depending on the typical political demographics of an area, this will also lend to whether or not there's public services available to incentivise people to move and/or live there - such a bus or train systems. (This also disincentivises the poor but that's a different soapbox for another day.) Large cities, in their parts, offer public services that rural areas (in the states) simply do not - the availability and viability of employment removed. If I were paying off a student loan debt, of course the higher wage[s] with the public services incentives are going to be more appealing. I don't have to own a car to get to work? Great! That's far less overhead that I have to deal with and allows more - theoretical - buffer cushion of assets to pay-off my loan[s] and/or live a comfortable life. This, of course, is discounting the simple fact that college loans have, themselves, grown disproportionately larger (compared to previous generations') and this is in large part due to the fact that universities can keep increasing the costs, indefinitely, because a college degree is no longer a commodity but a necessity for a lot of positions (experience can trump a degree in our field but this trend is decreasing). Not only this but because the loans are guaranteed by the government, the universities are getting paid - no matter what. I would expect, in the next 10 years, for people to start hitting $1M for their overall loans, simply because it's a choice between two perceived "evils": Debt and a "guaranteed future" or no debt and a perceived endless cycle of poverty. (Yes, I'm aware of trade skills and I'm not arguing for or against them, here, just noting that they are, for a large part, ignored in overall society.) I don't an answer to the problem but I can tell you that it's not a simple as student loan debt, when it comes to brain drain of rural areas. There are many other factors at play, the least of which (for our field), is that you can't work somewhere where the jobs simply do not exist. Someone would say "then make the jobs" but it is nowhere near that simple; especially, in rural America, where the proliferation of technology is still a remote possibility. For example, there are states that are so invested in other industries that they depend on the IX of other states (e.g.: Louisiana routing through SN) because they refuse to invest in building in the infrastructure in their own states. That's a reality that will, seemingly, never be addressed because it's the status quo.

RickJWagner 8y ago

"To be sure, the Federal Reserve said it couldn't determine whether the student loan debt is causing young college grads to move to cities." Of course not. Since time began, kids have moving to where higher paying jobs are found. CBS is too blatant in trying to catapult 'student loan debt' into the headlines.

swoongoonz 8y ago

I would argue it's not just rural America, it's also smaller markets and cities. Cities like Salt Lake City, Sacramento, Nashville, Omaha, and Portland (OR), can't compete with the larger markets. If you have enough skills, you aren't going to stay in those markets long before a recruiter from the major cities reach out.