Maine tries to attract young workers by paying off student loans
Maine lawmakers are trying to entice young workers by forgiving up to $40,000 in student loan debt to first-time home buyers.
Maine Senate President troy jackson Recount Business Intern Pine Tree State has a significant challenge filling its job market. Residents are aging and retiring, while at the same time, younger workers may not have the funds for a down payment or the financial record of an experienced buyer.
“A lot of people are trapped in debt. I very strongly believe it was intentional,” Jackson said.
According to a report by the Maine State Housing Authority, the top two reasons people put off buying a home are that they can’t save enough for a down payment and they don’t feel sufficiently secure financially due to existing loan debt.
The Maine Smart Buy program would allow eligible first-time home buyers to purchase a home through the MaineHousing First Home Loan Program and receive a rebate of up to $40,000.
The Maine Smart Buy program is designed after similar programs in Maryland and Illinois. To be eligible, participants must have a student debt balance between $5,000 and $40,000 and work with the state to pay off the debt by the time participants close their homes. It must also be their primary residence for at least five years or else they will be required to repay some of the student loan assistance to the state.
Entrants must also have a minimum credit score of 640 to be eligible and the home must be valued between $86,600 and $131,100 depending on location and family size. Other details of the bill are still being worked out by the Maine Senate, which sits until April.
Student loan debt is the third highest debt Americans carry behind mortgage debt and credit card debt totaling $1.7 trillion. President Joe Biden pledged to forgive $10,000 in student loan debt ahead of the presidential election but has rarely mentioned it since. Also, Biden did not mention canceling student debt in his State of the Union. address this week.