An Idea in Principle

Jay Christensen-Szalanski has proposed a tax subsidy designed to improve Iowa's retention rate for new graduates, helping to fix the "where have all the young people gone" problem. It allows businesses to forgive up to $25,000 in student loans as a perk, theory being that it will give students the financial ability to stay home, and pay for itself as more educated graduates with disposible income remain in the state and businesses choose to expand accordingly. As I see it, there are three basic hurdles to keeping college graduates local: 1) We have few meccas of progressive living (read: places with actual things to do, interesting food, and a nightlife); 2) The places where we do have such things - Iowa City is a good example - it's damn competetive and difficult to find a job; and 3) If you do manage to find a job, starting salaries are tiny compared to nearby metropolitan areas like Chicago and Minneapolis. This proposal could conceivably help alleviate factor #3. If it does attract new businesses, #2 would also improve. Question is, does it work? Anybody know of any studies out there showing success rates for this type of proposal?