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* I dunno about this…
With burdensome student loan debt often cited as the reason young adults postpone buying homes, an Illinois agency has begun paying off student loans for people who want to become homeowners. […]
Aspiring home buyers who meet certain income limits can get up to $40,000 in student loan debt wiped out, changing their debt-to-income ratio to something that makes obtaining a mortgage easier. The buyers have to meet certain income standards—in Cook County, the individual income limit is about $109,000—and agree to live in the property they buy for three years to get the student loan debt forgiven. […]
The $25 million program, called SmartBuy, has a goal of helping 500 to 1,000 young adults buy homes, said Javier Gumulcio, IHDA’s director of homeownership
I mean, I suppose I’ll be happy for the folks who qualify, but imagine the amount of people who qualify for that aid in this state who will have to rely on dumb luck to “win” this money.
posted by Rich Miller
Wednesday, Mar 10, 21 @ 12:27 pm
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Certain professions(teachers) also have programs like this to erase student debt.
If a teacher chooses to teach in an underserved area for 10 years, they will get their student debt removed. At least there was a program like this about a decade ago.
There are also other fields, although I’m less familiar with the details, where taking a position in public service in the field of your degree will also lead to a cancelation of a certain amount of student debt.
Until the root cause is addressed, programs like this are a better option than nothing.
Comment by TheInvisibleMan Wednesday, Mar 10, 21 @ 12:31 pm
There’s also issues around who is in need of help most–I don’t begrudge anyone this, but the group I would target are those who never graduate/earn an award. They tend to be the people with the highest rate of default and it keeps them from going back to get the award. Those with over $40,000 tend to have gone to for profits or have an advanced degree. The for-profit issue should generally be forgiven for any of the predatory schools. Those with an advanced degree might be in the mix of helping some depending on the occupation, but these are often the people with the most ability to pay.
Comment by ArchPundit Wednesday, Mar 10, 21 @ 12:36 pm
We should focus on creating level playing fields.
Comment by Franklin Wednesday, Mar 10, 21 @ 12:40 pm
Do part-time students with student loan debt that are also homebuyers already paying a mortgage qualify? If so, I’d like to apply
Comment by Lester Holt’s Mustache Wednesday, Mar 10, 21 @ 12:47 pm
I’m confused as to why this is being compared to the lottery? My understanding is anyone who qualifies will get the money until the whole fund is depleted. Sure, those who are looking to qualify later this year may be out of luck if the funds run out, but if you’re eligible now you get the money now. Am I missing something?
Comment by smart Wednesday, Mar 10, 21 @ 12:48 pm
Cue a Tim Novak story in the Sun-Times in a few years showing how friends and family of politicians were the recipients of this program.
Comment by Anon Wednesday, Mar 10, 21 @ 12:50 pm
it is good to have programs that forgive debt when one decides to, for example, take on a teaching position. it is a whole other story when they can’t pay one debt but agree to take on another. home ownership is a big responsibility, not a prize. teaching people to save for a downpayment is an important piece of creating responsible homeowners who will have a whole list of things to fund to keep their investment going. bad idea.
Comment by Amalia Wednesday, Mar 10, 21 @ 12:55 pm
Receiving loan forgiveness after a decade working in a public service job is different from receiving forgiveness for wanting to buy a home.
Such a program won’t do much for student loan debtors (500-1000 people); it won’t do much for home ownership, and it has the potential to - perhaps, unwittingly - contribute to even more housing inequity.
So I’m with Amalia - no.
Comment by dbk Wednesday, Mar 10, 21 @ 1:21 pm
It’s not that I don’t have sympathy. My own grandson is one of these people. Five years of debt and no degree. I’d like to see a federal program to pay off all the student debt and a European type system where, if you can get entrance to a piblic (not private) university you don’t pay tuition regardless of family income.
Still, this seems to be a bad priority for a state drowning in debt and dependent on regressive taxes.
Not as legislators playing Barney Fife, however.
That one is going to get someone killed.
Comment by Streamwood Retiree Wednesday, Mar 10, 21 @ 1:29 pm
These programs are a waste of state resources - people see these programs and then vote against the fair tax.
Comment by Chicagonk Wednesday, Mar 10, 21 @ 1:56 pm
Where is the equity in this program for folks who didn’t go to college or paid of their student loans and can’t afford a down payment on a home?
Comment by Carla Wednesday, Mar 10, 21 @ 2:05 pm
I graduated with a masters degree in a fairly well-paying field and had about $5k in debt at the end, with no financial help from my parents. It can be done, even today. Some of my aid was provided by my employer who paid some tuition with the stipulation I work for a certain period of time after graduation or would have to pay it back. For the forgiveness program, I agree with the 3-year residency requirement. I also agree that it appears to reward early birds and people most knowledgeable about the program, and not necessarily the ones most deserving of the help.
Comment by Six Degrees of Separation Wednesday, Mar 10, 21 @ 4:11 pm
IMO all of these student debt forgiveness ideas ignore the fact that forgiving debt could be an incentive for higher education to raise its prices, making the problem worse.
Comment by Sir Reel Wednesday, Mar 10, 21 @ 4:22 pm
== imagine the amount of people who qualify for that aid in this state who will have to rely on dumb luck to “win” this money.==
Yes, unfortunately this lottery has the feel of “future investigative expose” written all over it from the get-go.
Comment by Responsa Wednesday, Mar 10, 21 @ 4:50 pm
No thanks to this program. If you graduate with no student loan debt but still struggle to pay for a home loan you don’t get any assistance?
The program has the right intention (I guess) but those dollars should be directed elsewhere. I’d hope too that only student load debt would be paid off for instate colleges and universities.
And what about people who have student loan debt and have managed to buy a home (not impossible) they get left behind?
Comment by Cool Papa Bell Wednesday, Mar 10, 21 @ 6:05 pm
=And what about people who have student loan debt and have managed to buy a home (not impossible) they get left behind?=
Not to mention the people that have paid off all their student loans, and still are not home owners (nor even want to be).
Comment by Essential State Employee Wednesday, Mar 10, 21 @ 7:25 pm
So is there an incentive or bucket of money for blue collar people? I mean they’re going to earn a million less over a lifetime than a college graduate and now their tax money is going to pay off these loans and help them get a house? Seems wrong
Comment by Frank talks Wednesday, Mar 10, 21 @ 8:21 pm
Where would the funding for this come from? Federal government grant might be OK, but no state funding should go to this.
Comment by DuPage Wednesday, Mar 10, 21 @ 9:04 pm
Or we could make tuition more affordable for everyone
Comment by Alton Giant Wednesday, Mar 10, 21 @ 9:04 pm