AUGUSTA — The Maine Senate approved legislation from Senate President Troy Jackson, D-Allagash, and Senator Chip Curry, D-Belfast, to improve access to homeownership through partial student debt relief. The vote was 20-13.
“Policies that make it easier for working families to make a good life here in Maine are good for all of us. For parents and grandparents, it is about keeping our loved ones close. For communities and businesses, it’s about making sure we have a new generation of workers and community leaders. With one of the oldest populations in the union, there is a whole generation of Mainers getting ready to retire, and we need young people to fill these roles and carry on this legacy,” said President Jackson. “LD 1978 is about making it possible for young people to stay in Maine and make a life for themselves whether they were born here or have chosen to make this state their home.”
LD 1978, “An Act To Promote Home Ownership by Reducing Education Debt” creates a program that would boost first-time homebuyers by using the MaineHousing First Home Loan Program criteria while forgiving an educational loan over 5 years. The program seeks to address two challenges preventing Maine from attracting and retaining 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.
“Making it accessible and affordable for our young families to live here is necessary if we want to invest in our future generations,” said Sen. Curry. “Between student loans, utilities, rent and other basic expenses, young and hard-working Mainers can’t begin to plan for homeownership. We’re relying on young people to lead our state through the future, and we’re not giving them the tools to achieve their American Dream in Maine. This program helps young people live and work in their communities and draws people back to Maine.”
Individuals must reside in the home purchased through the program for a minimum of five years, otherwise, the Finance Authority of Maine will be able to collect on any loans owed by participants who did not comply with the program.
Last year, President Jackson introduced legislation to establish a similar program. That proposal ultimately turned into a resolve, directing MaineHousing, 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. LD 1978 is the result of this study.
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. At the same time, the median sales price for a single-family home increased in every Maine county last year. According to the Maine Realtors Association, the median price of a home in Maine reached $299,000 in 2021 – a 16.8 percent increase from the previous year.
Several other states have adopted similar programs including Maryland and Illinois. LD 1978 faces additional votes in the House before returning to the Senate for enactment.