Brain Report: Ohio Grants for Grads

Ohio's latest brain drain boondoggle is back in the news. The Grants for Grads program has been a bit of a disappointment. Still, Governor Ted Strickland is tying himself to the initiative in a bid to win reelection:

"Grants for Grads is one creative way to encourage talented young people to call Ohio home, but it's only one way," Gov. Ted Strickland said.

Recent college graduates won't buy a house in a community if they don't have a job, Strickland said. He said other state programs are aimed at encouraging job-creation.

The home-buying program offers a grant worth up to 2.5 percent of the purchase price and a lower interest rate on a 30-year loan. To be eligible, applicants must have earned a college degree within the past 18 months and have graduated from an Ohio high school. The college degree can be anything from an associate to a graduate degree from a school inside or outside the state.

The money can be used toward a down payment or closing costs. It doesn't have to be repaid as long as the buyers live in Ohio for five years. If they don't, the state uses a lien on the house to recoup money.

Since last October, 120 recent college graduates have received assistance through the program. Of those, 90 percent have been between the ages of 20 and 30. The majority - 83 percent - have been white. And more than half had credit scores above 700 points, which is usually considered good enough to get borrowers more financing options and better interest rates, said Cindy Flaherty, director of homeownership for the Ohio Housing Finance Agency, which operates the program.

As of last week, the agency had invested $329,218 in the program, which is paid primarily through the issuance of tax-exempt mortgage-revenue bonds, Flaherty said.

Participants on average received $3,076 in down-payment assistance and paid $120,205 for their homes, she said.

I'm trying to figure out how Ohio can measure success. What if those who used over $300,000 in state money would have stayed regardless? I'm sure real estate agencies are in love with the subsidy. I smell quid pro quo in terms of campaign contributions.

Fighting brain drain is also popular with the voters. Strickland knows this. Neither party is above serving red herring to the public. It's bad policy and Ohio deserves better.