Maine lawmakers are weighing a proposal that could forgive up to $40,000 in student loan debt for first-time buyers in the state.
The Maine Smart Buy bill would pay off student debt of at least $5,000 over five years as long as the buyer lived in the home for that long. Buyers must meet credit score requirements and face limits on the cost of the home they purchase.
The bill would offer “an opportunity to attract and retain young people by supporting a program that increases homeownership and provides student debt relief,” testified Democratic Senate President Troy Jackson, who was in favor of the proposal. “We need people to come to Maine to help be a part of our tax base, be part of the economy. And I think this is a great way to do it.”
Student debt is a common roadblock holding back aspiring first-time home buyers. Half of the potential home buyers surveyed in 2021 say they haven’t bought yet because of student debt, according to a report by the National Association of REALTORS® and Morning Consult. Millennials are the most likely to point to student debt for delaying homeownership.
Other states have offered programs similar to Maine’s proposal in helping to relieve student debt for first-time buyers. For example, Illinois and Maryland offer “SmartBuy” programs that pay off student debt for young adults who get a mortgage in the state. There are eligibility requirements and caps that young adults must meet to participate.
Maine has created other programs to attract more home buyers. In 2006, it touted a new campaign to bring in new residents: Visit for a Week, Stay for a Lifetime. As part of the program, those who visited Maine on vacation and then moved there got their vacation expenses recouped.