Maine may be following the lead of Illinois and Maryland in forgiving student loan debt up to $40,000 for first-time homebuyers.
The Maine Smart Buy bill would pay off any student loan of at least $5,000 over five years as long as the buyer lived in their home for five years. Buyers must also have a minimum credit score of 640 and can only purchase homes valued from $86,600 to $131,100 depending on family size and county. Only the buyer’s personal student loans count toward the program.
MaineHousing and the Finance Authority of Maine are backing the renewed version of state Sen. Troy Jackson’s student loan forgiveness bill from last year. Jackson discussed the bill at length during a hearing Tuesday.
“A lot of this is trying to bring our young people back to Maine [and] helps them be able to finance a home,” Jackson said.
BIDEN PRESSURED BY THE LEFT ON STUDENT LOANS
Students in Maine had an average of $33,591 in debt upon graduation in 2019, according to a report. The national average range in 2018, according to the Federal Reserve, was $20,000 to $24,999 in 2018. That same year, 2 in 10 adults reported that they were behind on payments.
63% of student loan borrowers indicated that they’d prefer any extra money to go toward the purchase of a home. Fifty-two percent said they couldn’t qualify for a mortgage because of their debt-to-income ratio.
“We need people to come to Maine to help be a part of our tax base, be part of economy,” Jackson said. “And I think this is a great way to do it.”
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If lawmakers pass the bill, the state’s General Fund would finance the payments with $10 million.
