Maine lawmakers are considering a proposal that would allow up to $40,000 in student loan debt forgiveness for first-time home buyers.
The proposed Maine Smart Buy Bill will pay off student debt between $5,000 and $40,000 over five years, as long as the buyer lives in the home they buy for the entire term. To qualify for the relief, buyers would have to meet credit score requirements and face limits on the cost of the home they can buy.
Democratic Senate Speaker Troy Jackson said the bill provides “an opportunity to attract and retain young people by supporting a program that increases home ownership and alleviates student debt.”
“We need people to come to Maine to help be part of our tax base, be part of the economy,” Jackson added. “And I think that’s a great way to do it.”
Surveys show that student debt is one of the biggest barriers preventing many aspiring homeowners from buying their first home. According to a 2021 report from the National Association of Realtors and Morning Consult, more than half of potential buyers said student debt had so far prevented them from buying. The same survey found that millennials are the generation most likely to cite student debt as a reason for delaying a home purchase.
Maine is not the first state to offer student debt relief as an incentive for first-time home buyers. Illinois and Maryland both run similar programs that pay off a large percentage of student debt for young adults who buy a mortgaged home in the states. Both programs have eligibility requirements and caps in place.
Maine, however, is quite progressive when it comes to incentives. In 2006, he created a new program called “Visit a Week, Stay a Lifetime” to try to attract new residents. Under this initiative, those who decided to move permanently to Maine after a short stay would be reimbursed for their entire vacation expenses.