Mountain of Student Debt? Move to Niagara Falls

Many who rail against the costs of higher education and the massive debts that most graduates carry point out that this drives graduates toward high-paying but potentially socially irresponsible jobs, like investment banking or private equity or a hedge fund, or really anything that pays well in this day and age, but is probably slowly gutting our economy. And jobs like this are in New York, San Francisco and Boston and barely anywhere else, so these increasingly unaffordable cities are your only hope as a recent graduate of extinguishing your massive student debts, right? Have you considered rural Kansas?


ABC News reports that some localities are offering student loan assistance to young, educated people — all they have to do is move to places that don’t fit the typical Young Urban Professional mould. They’ll have to be Young Rural Professionals, should they choose to move to one of Kansas’ Rural Opportunity Zones — located in 50 different counties in the state; or maybe they’ll be Young Blighted-Urban Professionals, should they move to downtown Niagara Falls, N.Y., an over-redeveloped, but somehow still blighted, neighbourhood located right next to the majestic falls for which the town is named.

Kansas is offering student loan payment of “up to $15,000” to college educated people moving to ROZs, reports ABC. That, or up to five years income-tax free. Niagara Falls’ program, by comparison, is more modest.

The class of 2013 from both Niagara University and Niagara County Community College will be the first with the opportunity to apply for the program, which offers up to $7,000 (over the course of two years) for paying down student debt. “To qualify, applicants will have to rent an apartment or buy a home within a designated downtown area,” writes ABC News — you can’t just move anywhere in the city.

And you might want to live somewhere other than downtown. Not that Niagara Falls is charming elsewhere — it’s not: think Detroit, Cleveland, or nearby Buffalo — but its downtown is the focal point for all of Niagara Falls’ sordid late-20th century history, as is well-detailed in this 2010 feature from Bloomberg Businessweek by Andrew Rice.

The article is well worth a read, especially for those with an interest in urban planning. As Rice points out, its story “encompasses just about every mistake a city can make,” and it all started when city hall decided to tear down Niagara Falls’ “quaint downtown” and “replace it with a bunch of modernist follies.” Now, one man owns most of downtown: Howard Milstein, the Manhattan real estate mogul and CEO of Emigrant Savings Bank.

According to the Buffalo News, Milstein and his brother own about 440 parcels of land in downtown Niagara Falls. They have done so over the last decade without developing any of the land, much to the chagrin of Niagara Falls residents who would like to see better days.

What this could — could! — mean for any recent grads looking to take advantage of this debt reduction deal, and move into the painfully blighted downtown Niagara Falls area is this: they might end up paying rent to Mr. Milstein, or some LLC he and his brother own, should they qualify for the grant money.

Milstein is a connected guy. Not only did his bank get a handsome bailout from the federal government post-2008, he recently had a one-sentence piece of legislation drafted up specifically for his bank by Staten Island representative Michael Grimm, which helps Emigrant slip under a Dodd-Frank rule that would require Emigrant to rearrange its capital structure, given its size. The bill basically changes a cutoff date in Dodd-Frank, so that Emigrant is considered to have less than $15 billion in assets, because according to bank officials it actually has about $10 billion — it was just briefly over $15 billion right around the old cutoff date. It’s all quite arcane and bizarre, and Politico has the whole story for interested parties. The bill passed out of the House Committee on Financial Services late in May.

The point is this: Milstein knows how to get what he wants in New York and Washington. And now the very city whose downtown he has been mothballing for a full decade is bribing young people to come in and make it livable again.

You might be able to pay back your student debt, but make no mistake, the man behind the curtain always wins.

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