Maine Wants to Cancel $40,000 in Student Debt if You Buy a House There
"People talk about the American dream, and people talk about how they could do it before. No one's seen this before."
There are a lot of factors at play that make home-ownership feel impossible for working parents in the United States. But as creative solutions are being debated — largely to the tune of targeted or wholesale student debt cancellation — lawmakers in the state of Maine have their own creative solution to the problem of student debt. And their idea of how to ease the burden of student debt in an effort to also increase home-ownership in that state, too.
According to Business Insider, lawmakers in Maine are attempting to attract young people by offering up to $40,000 in student-load debt forgiveness for first-time homebuyers.
Troy Jackson, Maine Senate President, told the publication that the state had become more of a retirement state and with that, there weren’t many prime-age workers. Maine was having “a real challenge of filling the job market,” but with the housing market being as expensive as it is, younger workers can’t afford to move there.
“The housing market’s exploded. That’s pandemic-related for Maine, and our wage system in Maine is not right sized for the housing market right now,” Jackson said. “People talk about the American dream, and people talk about how they could do it before. No one’s seen this before.”
And that’s where the Maine Smart Buy program comes in. It’s a potential solution to help employers ease the struggle of finding workers and allow younger adults to pursue a dream job and own a home. Participants of the program must have a student-debt balance between $5000 and $40,000 and they need to commit to living in the home for five years. “If the buyer chose to sell the home within five years of the purchase, a portion of the student-loan assistance must be repaid to the state,” Business Insider shared.
To participate, first-time homebuyers must have a minimum credit score of 640 and their home should be valued between $86,600 and $131,100, depending on family size and location.
“I think this should be a priority for all of us,” Jackson said. “I would now hope that the business community, which runs many of my colleagues’ mindsets, would get involved in this because they’re screaming for the state to do something to help bring workforce to Maine.”
This bill is set to have more sessions to work on its passing, but if it does, it won’t be the first of its kind. Illinois SmartBuy program also offers a student-loan payment of up to $40,000 and an additional $5,000 used for a down payment or closing costs.
The federal government has been offering student-debt forgiveness to some groups but it’s not been widespread. But Jackson is hoping this new proposed bill will ease some burdens.
“I would wish that the federal government would do more for people that are already trapped in it. As a state, we’re not gonna be able to fix everybody’s issue, unfortunately. I’d like to,” Jackson said. “Right now, I’m trying to make sure that people can get into the state or stay in the state. This is one way to do it.”