ILLINOIS — The state’s SmartBuy student loan forgiveness program, which helped hundreds of Illinois residents erase debt and become homeowners, has halted new applications after funding ran out in February.
Run by the Illinois Housing Development Authority, SmartBuy provided up to $40,000 in student loan forgiveness and an additional $5,000 in down payment assistance for homebuyers.
But as of now, the future of the program remains unclear. Officials have not announced when — or if — funding will be restored.
Hundreds Benefited Before Pause Took Effect
The program has already helped more than 755 homebuyers, with another 482 deals pending before funds dried up. Applicants like Josue Villalpando, a UIC graduate with nearly $49,000 in student debt, were able to buy homes thanks to the relief.
“It was something I didn’t think was possible,” Villalpando told The Times Weekly, after purchasing a home in Lansing through SmartBuy in March.
However, newer applicants are now locked out as the application portal remains closed.
Illinois Faces Over $63 Billion In Student Loan Debt
Illinois ranks 7th in the U.S. for total student loan burden — with over $63 billion owed, according to the Education Data Initiative. Meanwhile, unemployment in the state remains among the highest nationwide, adding pressure on residents with large student debt loads.
The Illinois Student Assistance Commission (ISAC) also offers multiple repayment programs for teachers, nurses, and public sector workers — but many are underutilized. Just 18% of eligible borrowers ever apply.
Federal Programs Add To The Uncertainty
The federal landscape is also shifting. The Biden administration’s SAVE plan — a key income-based repayment option — was blocked by a court following legal challenges from Republican-led states.
In addition, the Department of Education is being restructured, with parts of its student loan oversight being transferred to the Small Business Administration — further delaying relief efforts and creating confusion among borrowers.
Borrowers Say Debt Delays Life Goals
Former CPS teacher Nicole Johnson, who has over $200,000 in student loans, said debt has stopped her from owning a home, despite being close to forgiveness through Public Service Loan Forgiveness (PSLF).
“Student loan debt is not a conversation,” Johnson said. “But it affects everything — mortgages, interest rates, mental health.”
Were You Planning To Apply For SmartBuy?
Has your application been delayed or blocked due to the pause? Share your story at ChicagoSuburbanFamily.com to help others understand what’s happening statewide.
