Legislation could entice more young farmers by offering student loan forgiveness

Legislation could entice more young farmers by offering student loan forgiveness

With the average age of farmers in America climbing ever closer to the average age of retirement, legislators hope to encourage more young people to enter the profession by offering them financial assistance in the form of loan forgiveness. 

US Representatives from both sides of the aisle joined forces Feb. 15 to reintroduce the Young Farmer Success Act, HR 1060, a long-shot bill that stalled in the last congress but if enacted would incentivize more young people to buy and operate farms and ranches by adding farmers to the Public Service Loan Forgiveness Program.

Under the program, some working farmers who made 10-years of student loan payments could have the balance of their loans forgiven, just like some other public service professionals, including teachers, nurses and those in government service.

In order to qualify though, the farm or ranch must earn gross revenue during the year from the sale of agriculture products at an amount established by the consumer price index and determined by the secretary, according to the bill. In 2015, when the bill was first introduced, that amount was set at $35,000.

This is slightly less than the average $43,750 net income that US farms brought in 2012, according to USDA.

“The number of new farmers entering the field of agriculture has dropped by 20%, while the average farmer age has now risen above 58 years old,” one of the bill’s sponsors, Rep. Joe Courtney, D-Conn., said in a statement.

He explained that the “skyrocketing cost of higher education and the growing burden of student loan debt are presenting major obstacles for young farmers” and, therefore, contributing to the overall aging of the profession.

Indeed, the National Young Farmers Coalition in 2014 found on average young farmers with student loans owed $35,000. In addition, more than half of the 700 young farmers it surveyed said they are currently farming but struggle to make their student loan payments.

An additional 30% of survey respondents said they wanted to farm, but don’t because they do not think they could make enough money to pay back their student loans, according to NYFC.

If enacted, the bill would bolster other tools at the government’s disposal for enticing younger farmers, including USDA’s Farm Service Agency’s loan program for beginning farmers, which have lower interest rates.

To qualify for these loans, farmers and ranchers have to be in their first 10 years of operation, their farms and ranches must be 30% or smaller than the average size farm, they must substantially participate in the operation and they must meet eligibility requirements, according to USDA.

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