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Union Station, Chicago, 1960. Photo: Bettmann Archive via Getty Images

College students from rural areas are moving to big cities for higher wages to help pay off their student loans, according to new research from the Federal Reserve.

Why it matters: A "rural brain drain" has been pulling college-educated people out of rural America and into urban areas, deepening an educational and political divide that is increasingly coming to define the country.

The average age of the U.S. rural population is going up, and the share of prime-working-age people is going down. Fewer people have college degrees, and more are unemployed.

  • In the past, experts have explained this dynamic as a lifestyle choice. But in its new analysis, the Fed points to student loans as an additional factor in the gravitational pull away from rural areas.

Researchers studied student borrowers, following their path across America for several years after they started paying back their loans. They found that:

  1. About half of rural residents who took out student loans still lived in a rural area six years later, compared to two-thirds who had not taken out loans.
  2. People with the most debt — those in the highest quartile of loan balances — were most likely to leave.
  3. Those who did move to cities did better financially. They were employed at higher rates and earned considerably higher wages, even when accounting for more expensive living.

This pattern was on hold during the 2000s, but has taken off post-recession, the analysis said. David Chang, CEO of Gradifi — which consults for companies on their student loan repayment programs — said he's seen the pattern.

  • "With 70% of today’s graduates borrowing an average of more than $25,000, it’s no question that college graduates are forced to live in expensive urban areas, because they have the highest concentration of high-paying jobs," Chang tells Axios.
  • "While these urban areas offer tremendous opportunities, these come at significant costs. The metro areas that are drawing the most recent graduates are among the most expensive in the country, which is also a challenge for those grappling with student loan payments."

Go deeper

Ben Geman, author of Generate
7 mins ago - Energy & Environment

Report: John Kerry plans to visit China ahead of Biden's climate summit

John Kerry. Photo: Zach Gibson / Stringer

John Kerry, President Biden's special climate envoy, is expected to travel to China next week for meetings with officials aimed at boosting collaboration, the Washington Post reported Saturday.

Why it matters: China is the world's largest carbon dioxide emitter and the U.S. is second-largest.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Health: Coronavirus cases hold steady at 65,000 per day — CDC declares racism "a serious public health threat" — WHO official: Brazil is dealing with "raging inferno" of a COVID outbreak
  2. Vaccines: America may be close to hitting a vaccine wall — Pfizer asks FDA to expand COVID vaccine authorization to adolescents — CDC says Johnson & Johnson vaccine supply will drop 80% next week.
  3. Economy: Treasury says over 156 million stimulus payments sent out since March — More government spending expected as IMF projects 6% global GDP growth.
  4. Politics: Supreme Court ends California's coronavirus restrictions on home religious meetings
  5. Variant tracker: Where different strains are spreading.

Second senior Matt Gaetz aide resigns amid federal investigation

Rep. Matt Gaetz (R-Fla.) walking out of the Capitol in January 2021. Photo: Stefani Reynolds/Bloomberg via Getty Images

Devin Murphy, Rep. Matt Gaetz's legislative director, has stepped down amid a federal investigation into sex trafficking allegations against the Florida Republican congressman, the New York Times first reported and Axios has confirmed.

The latest: "It's been real," Murphy wrote in an email, obtained by Axios, to Republican legislative directors on Saturday morning, with the subject line: "Well...bye."

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