Bill would wipe out student loan debt for homebuyers
Outgoing lawmaker introduces measure
WARREN — A new bill introduced in the Ohio Senate would encourage college and vocational school graduates to stay in the state by tying the elimination of student loan debt to buying a home for the first time, according to a Boardman lawmaker.
Senate Bill 334, introduced Tuesday by outgoing, term-limited state Sen. Joe Schiavoni, D- Boardman, would help an estimated 400 low- to middle-income homebuyers with outstanding student debt from a college, university, vocational school or other post-secondary educational institution eliminate up to the full amount of the debt through the purchase of a home.
“Too many Ohioans who are saddled with student loan debt aren’t buying homes and that is hurting their future financial prospects, contributing to brain drain and stifling our housing market,” Schiavoni said. “The plan will incentivize new graduates to stay here in Ohio and will stabilize neighborhoods at the same time.”
Homebuyers would be eligible to have 20 percent of the home’s cost forgiven at closing. As long as the homebuyer makes their mortgage payments on time, they would no longer be required to pay on their student loans and the debt would be wiped clean after five years in the home. If the homebuyer’s debt exceeds 20 percent of the home’s cost, they would be required to pay the remaining debt at closing.
The bill is based on Maryland SmartBuy program, which started in 2016 and has eliminated $1 million in student debt, according to Schiavoni’s release. The program has been successful in Maryland, Schiavoni’s release states, so another $3 million has been appropriated there to expand it.
It would amend the Ohio Revised Code governing the Ohio Finance Agency, already responsible for “assisting with the financing, refinancing, production, development, and preservation of safe, decent, and affordable housing for occupancy by low- and moderate-income persons,” according to the ORC.
The bill would direct the state agency to work with lending institutions to provide mortgages that specify the elimination of the debt, in conjunction with other first-time homebuyer programs the agency administers, according to the bill’s language.
The bill’s co-sponsor is state Sen. Kenny Yuko, D-Richmond Heights.