- Newburgh Heights, Ohio, is helping graduates pay off their student loans.
- Any student borrower with a four-year degree is eligible.
- The catch: You'll have to buy a house in the town and stay put for more than a decade.
Trying to pull yourself out of student debt? You could spend less, earn more – or move to Newburgh Heights, Ohio.
The 2,000-person town, less than 10 miles from Cleveland, is offering to help college graduates pay off their student debt.
For struggling borrowers, don't expect a quick fix.
Here's how it works: You need to be a graduate with student debt from a four-year accredited college or university. You'll have to purchase a house in the town valued at $50,000 or more within five years of graduating. The average house in Newburgh Heights costs $65,000, the town's mayor, Trevor Elkins, told CNBC.
After 15 years, the town will pay off half of your student debt, up to $50,000. There are two pay-outs, 80 percent at the 10 year-mark and the final 20 percent after the 15 years. Even if you've paid off your student loans by that time, you'll receive the funds for the amount you owed when you first enrolled in the town's program.
You don't need to work in the town, just live there. The program goes into effect in early January.
What if the town decides to discontinue the program after you've packed up your bags and moved there? Don't fret, Elkins said. Once a borrower is approved, the terms and conditions are locked into a contract to guarantee he or she gets the relief.
As student debt has come to burden Americans more than auto or credit card debt, several cities and states have created creative ways to help residents with the loans, said Mark Kantrowitz, an expert on education debt. Maine recently introduced a program that allows student borrowers to save on their income taxes.
Elkins said he's tired of seeing young people leave Newburgh Heights behind. "We wanted to provide an incentive for them to stay and put down roots here in the community, transitioning from the old Rust Belt manufacturing economy to a knowledge-based economy of health care and technology," he said.
He provided a list of major employers in the area, including Arconic, Cleveland Clinic, Metro Health Hospital and the Cleveland Division of Water. Unemployment there hovers around 4 percent.
However, struggling borrowers may not want to sink deeper into debt with a mortgage, Kantrowitz said. Also, he said, you'll be stuck in the same house for more than a decade to get the deal, which could become a problem if you receive a good job offer elsewhere.
Still, Elkins said, the town has been inundated with calls from realtors and hundreds of prospective home buyers in Maine, California, Georgia and New York.
"We haven't been able to keep up with returning phone calls and emails, but we will get to everyone," he said.
More from Personal Finance:
In just 20 minutes you could be on your way to that new job
Want to win at 401(k) investing? Try a less-is-more approach
Do this one thing to save your financial sanity during the holidays