AUGUSTA — A bill from Senate President Troy Jackson, D-Allagash, that would reduce student debt and help young Mainers compete in a tough housing market earned unanimous support in the Maine Senate on Monday. LD 1709, “An Act To Promote Home Ownership by Minimizing Education Debt,” otherwise known as the HOMED Act, would create a program to incentivize young Mainers to settle in Maine, whether a person was born here or chose to make Maine their home.
“Year after year, politicians in Augusta talk about the need to attract and retain young workers as Maine’s current workforce prepares to retire. But between student debt and Maine’s outrageous housing market, too many young people can’t afford to return to the state they love to live, work, raise a family and eventually retire,” said President Jackson. “This bill seeks to bring Mainers home by providing student debt relief and improving homeownership for young people.”
The HOMED Act seeks to address two challenges preventing Maine from attracting and retain young people: the cost of post-secondary education, whether it’s a two-year community college program or a four-year program, which leaves many adults with tens of thousands of dollars in student debt; and the out-of-control housing market, which continues to push the dream of homeownership further out of reach.
“No one should have to choose between an education and a home. But, unfortunately, this is the reality facing far too many young Mainers today. Maine has the 8th highest student debt burden in the nation; two-thirds of Maine’s college graduates leave school with loan debt, with the average amount of that debt is between $32,000 and $36,000. This is deeply concerning. At the same time, Maine’s residential housing market saw record sales in 2020, up nearly 10 percent since 2019, and values rose almost 14 percent for the median sales price, up to $256,000,” said Assistant Senate Majority Leader Mattie Daughtry, D-Brunswick. “For many young Mainers, the dream of homeownership must remain a dream for years until they have paid off their school debt. Fewer than 35 percent of individuals under 35 own their own homes in the United States, a statistic that is expected to last if student debt continues to rise. Even with a well-paying job, they cannot save for a down payment or qualify for a mortgage when they have thousands in student debt. The math simply just does not work!”
The bill directs the Maine State Housing Authority, in consultation with the Finance Authority of Maine (FAME), to research and design a program that helps people get into homes by helping to reduce student debt. Both MSHA and FAME would then report back to the Legislature in January so the Innovation, Development, Economic Advancement and Business Committee can report out a bill to get this program off the ground.
In Maine, the average student graduates with $33,500 in student debt. This debt is crippling 178,200 Maine residents — 13.3 percent of the Maine population.
LD 1709 is modeled after a Maryland program designed to improve homeownership through student debt reduction. This bill charges the Maine Housing Authority and FAME to develop a program that would work for Maine. FAME also testified in support of the proposal.
LD 1709 will now go to the House for a vote.