AUGUSTA — A bill from Senate President Troy Jackson, D-Allagash, that looks to reduce student debt and help young Mainers compete in a tough housing market was signed into law by Governor Janet T. Mills on Tuesday. LD 1709, “An Act To Promote Home Ownership by Minimizing Education Debt,” otherwise known as the HOMED Act, will create a program to incentivize young Mainers to settle in Maine, whether a person was born here or chose to make Maine their home.
“This is a big win for young people who dream of purchasing a home for their family but are saddled by student debt and cannot compete with out-of-state bidders purchasing their second home. With this program, we can improve homeownership through student debt relief and ensure we have the workers we need to power our communities and economy for generations to come,” said President Jackson. “I’m hopeful that this new law will make it easier for young people to make Maine their home whether they’re Mainers by birth or by choice.”
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.
“Maine needs to find creative, innovative ways to attract and retain young people. Between the high cost of housing and homeownership, and looming student debt, it’s almost impossible for young families to move to Maine to live, work, raise a family and eventually retire,” said Assistant Senate Majority Leader Mattie Daughtry, D-Brunswick. “The current situation isn’t working, and that has huge ramifications for our workforce, communities, and economy. By establishing a program that tackles both student debt and the booming housing market, we can give young people the boost they need to realize their American dream in Maine.”
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.
The new law will take effect 90 days after the Maine Legislature adjourns sine die.