Near the end of the summer, Mike Black signed a lease on a 4,100-square-foot, six-bedroom house, a short bicycle ride away from downtown and his startup’s co-working space. He and his four roommates pay $285 a month in rent. They pay nothing for the office.
“It keeps our burn rate really low,” said Black, who graduated from Penn State in May. “When we move to a city, that’s not going to be the case.”
Thousands of recent graduates like Black are finding their college towns friendlier places to start their careers than leaving for the unknown. College towns, with their mix of matriculation and mindpower, offer several benefits for both young and old, not the least of which is saving money. Graduation may be the start of a new journey, but it doesn’t necessarily mean starting over.
For recent grads, those benefits — lifestyle, comfort, an in-place network of friends and potential job contacts — are particularly attractive. A recent study by personal finance company ValuePenguin ranked State College 15th out of 382 as one of the best cities for new graduates. Each of the top 20 cities on the list are college towns.
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Madison, home of Big Ten rival Wisconsin, topped the list.
“Students are doing well in college, they’re enjoying where they’re going to college and in a lot of cases, those same students are thinking ‘hey, I’d really love to work in this city rather than move back home,” said Andrew Pentis, a lead analyst of the study.
The study looked at three variables: jobs, affordability and lifestyle. Each was based on 27 data points culled from sources such as the Bureau of Labor Statistics and the Census Bureau. They factored in aspects like unemployment rates, student debt, entertainment options and cost of living.
State College ranked eighth in jobs and 17th for lifestyle, but near the bottom of the list (369th) for affordability. Its metropolitan statistical area boasts the highest percentage of rental households in the state, according to the National Low Income Housing Coalition, much of it due to the university’s presence.
But, the numbers say, most can’t afford their rent. The NHLC puts the monthly rent affordable at the mean renter wage at $518. The State College metropolitan area’s fair market rent is $886 and its median gross rent — which is the 50th percentile compared to the FMR’s 40th percentile — is $947, according to the Census Bureau.
Still, those who stay say the benefits outweigh the costs. Matt Woods, 23, founded his 3-D-printing startup X Material Processing last summer while still a mechanical engineering student at Penn State. Since graduating in December, his company, which has office space at the school’s Innovation Park, has since won thousands of dollars in university-sponsored competitions. In August, it sold one of its printers to the school. It’s set to hire its first paid interns next semester.
“There’s not much reasoning to go elsewhere,” Woods said. “Pretty much all the resources are here.”
Black says he’s looking to take ParkingBee, an online platform that connects users to parking spaces, to a bigger market in the near future. But he credited Ben Franklin Technology Partners and the Happy Valley LaunchBox, two resources geared toward helping startups, for getting him to the point where he’s thinking bigger. If he ever has a question, he said, his co-working space at the LaunchBox is just a block away from campus.
“You can just walk right up to them,” he said.
Austin, Texas, Philadelphia and New York are just a few places where the 24-year-old is looking to move the company. But until then, there’s no place like home.
“State College is called Happy Valley for a reason,” he said.