Sending Office: Honorable Marcy Kaptur
Co-Sponsor Bill to Turn Student Debt into Equity
Original Co-sponsors: Representatives Wm. Lacy Clay, Pramila Jayapal, Cindy Axne
I invite you to become an original cosponsor of the Transform Student Debt to Home Equity Act of 2019 –a bill that enables graduates to transform their student debt into an opportunity to purchase and own a home.
With an estimated $1.56 trillion student debt owed to the federal government, plunging homeownership rates among young people, and 16.8 million habitable homes sitting vacant in the United States, our nation must find a way to address the student debt vs.
housing conundrum. Luckily, there is a popular lending instrument already in widespread use that could serve as a significant bridge to the future: the home mortgage. This common lending tool, over time, has the power to transform student loan repayments
into a financial instrument for building equity: the home.
Creating a path for creditworthy student debt holders to convert their debt payment stream into home equity would require many federal departments to collaborate. However, an initial effort to test the concept can take the form of a pilot program through
the Department of Housing and Urban Development (HUD) and the Federal Housing Finance Agency (FHFA).
This is what the Transform Student Debt to Home Equity Act achieves. The bill authorizes HUD and FHFA to establish a pilot demonstration that connects creditworthy federal student debt holders with housing properties for sale but held by
the federal government. The goal of the pilot project would be to create a program that recalculates financing terms, debt-to-income ratios, interest rates, or other factors in order to transition federal student loan debt into long-term homeownership. The
bill also requires the related agencies to report to Congress on such a pilot program within 90 days of enactment.
The Transform Student Debt to Home Equity Act can be used as a national model for enabling college graduates to restructure their student debt into an opportunity to purchase habitable foreclosed and vacant homes across the country. Eventually, participants
would help strengthen neighborhoods, and buoy property values locally and on the federal ledger simply by maintaining and investing in a home mortgage.
The status quo has created a permanent class of millions of student debtors without the opportunity for equity homeownership. We have the resources, the power, and a compelling economic interest to do something about it. Support the Transform Student
Debt to Home Equity Act as a cosponsor. Please contact my staff Nicole Thompson at Nicole.Thompson@mail.house.gov with any questions.
Member of Congress
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