Besides paying down a student's debt, the program will also address concerns about employee recruitment and retention among New Hampshire employers, particularly technology companies.
"Almost all high-tech companies in New Hampshire can't find enough engineers and technicians to replace the baby boomers who are retiring," said Fred Kocher, president of the New Hampshire High Technology Council.
Moreover, attracting homegrown talent with a loan-repayment incentive is likely to cost a company less than recruiting from out of state. "It would be a lot less expensive to hire a UNH engineering student than to relocate an engineer from California," Kocher said.
My first concern would be the funding of graduates who would stay regardless of the money for student loans. However, the employer focus of the program would draw in companies that are struggling to find qualified workers for whatever reason (e.g. better pay in Boston). Employers are paying down student debt. In that regard, the idea has some merit. However, I don't know if the state contributes any money or helps businesses to pay for the debt reduction.
I'd use the loan-repayment incentive to target out-of-state talent and have New Hampshire foot the bill for marketing the opportunity. Establishing a pipeline of California engineers to New Hampshire will pay greater dividends in the long run. Perhaps there are a bunch of Left Coasters who would rather live free or die.
Update: The current New Hampshire brain drain (55% of graduates leave) initiative reportedly costs state taxpayers nothing.