AUGUSTA — A bill from Senate President Troy Jackson, D-Allagash, to reduce student debt and help young Mainers compete in a tough housing market received a public hearing today before the Legislature’s Committee on Innovation, Development, Economic Advancement and Business.
LD 1709, “An Act To Promote Home Ownership by Minimizing Education Debt,” the HOMED Act, creates a program to incentivize young Mainers to settle in Maine, whether a person was born here or chose to make Maine their home. The proposal directs the Maine State Housing Authority, in consultation with the Finance Authority of Maine, to design and administer the Promotion of Home Ownership by Minimizing Educational Debt Program.
“It’s no secret that Maine is an aging state. It’s why lawmakers talk a lot about how we can attract and retain young families to keep our communities and economy thriving for future generations. However, between the high cost of student debt and the tough housing market all across the state, it’s getting harder for young people who grew up in Maine to come home to work, live and raise their families,” said President Jackson. “LD 1709 aims to bring young Mainers home by getting them HOMED. This could be a game-changer for the next generation of Maine homeowners, giving young people a leg up as they try to compete with out-of-state buyers.”
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, leaving many adults with tens of thousands of dollars in student debt; the out-of-control housing market, pushing the dream of affordable housing further and further out of reach.
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.
“For many young Mainers, the dream of homeownership must remain a dream for years until they have paid off their debt. 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 just does not work! That is why I am a proud sponsor of LD 1709, An Act To Promote Home Ownership by Minimizing Education Debt,” said Assistant Senate Majority Leader Mattie Daughtry, D-Brunswick. “This bill will create a program through the Finance Authority of Maine to target financing to Mainers by helping to alleviate student debt and to promote homeownership.”
According to the Maine Realtors Association, the median sale price for homes statewide reached $268,500. This is an increase of 17.79 percent compared to March 2020. The COVID-19 pandemic has clearly played a role in accelerating this trend. This spring, the average home sat on the market for 11 days, compared to 48 days last spring.
“Such a program could be a valuable tool in attracting to, or retaining young people in, Maine. With the oldest population in the country, our state stands to benefit from creating a linkage between student loan debt relief and homeownership. We know there is a successful example of a program like this in Maryland, and in at least one other state, which we would study and learn from in developing this program,” said Erik C. Jorgensen, MaineHousing.
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.
The Finance Authority of Maine (FAME) testified in support of the proposal. LD 1709 faces additional work sessions in committee.