2019 Maryland Student Loan Debit Relief Credit

The 2019 Student Loan Debt Relief Tax Credit Application Process is now open

Student Loan Debt Relief Tax Credit Process:

      1.      To be considered for the tax credit, applicants must:

·      Complete the application and submit student loan information, including Maryland Income Tax forms, college transcripts, and lender documents​

      2.      The tax credit application process closes each year on September 15th to allow MHEC to process ​the applications and issue the tax credit awards.

·         Notification of tax credit awards are sent to applicants in mid-December.​

3.      Upon being awarded the tax credit, recipients must:

·         Use the credit within two years to pay toward their college loan debt; and

·         Submit documentation showing proof of loan payment(s) to MHEC.

This is not a payment that will be sent to you. This is a tax credit on your Maryland Income Taxes.

Who is eligible to receive the Student Loan Debt Relief Tax Credit?

The tax credit will be available to Maryland taxpayers who:

1. Complete and submit an application to the Maryland Higher Education Commission by September 15th, either electronically or through the post office;

2. Maintain Maryland residency for the 2019 tax year;

3.  Have incurred at least $20,000 in undergraduate and/or graduate student loan debt; and

4.  Have at least $5,000 in outstanding student loan debt remaining when applying for the tax credit.​

How does MHEC decide who receives Tax Credits each year?

MHEC follows the statutory law and regulations when prioritizing who will receive tax credits in any year. Section 10-740(D) of the Tax General Article of the Annotated Code of Maryland states: “The Commission shall prioritize tax credit recipients and amounts based on qualified taxpayers who: (1) have higher debt burden to income ratios; (2) graduated from an institution of higher education located in the State; (3) did not receive a tax credit in a prior year; and (4) were eligible for in-State tuition.” See also 13B.08.17.05 of the Code of Maryland Regulations (COMAR).

How to Apply for the Student Loan Debt Relief Tax Credit

Click here to apply​

If you have questions, please view the Frequently Asked Questions.pdf for more information.

Proof of Payment to Lender

Upon receiving the Student Loan Debt Relief Tax Credit, each recipient must use the credit within two years to pay down the balance of the student loan debt.  Failure to do so will result in recapture of credit back to the State.​

Recipients of the Student Loan Debt Relief Tax Credit have two options for debt repayment:

(1) Make a one-time payment for the amount of your tax credit to the lender, or

(2) Make monthly payments to the lender until the amount of the tax credit is paid

Providing Documentation of Proof of Payment:

A VALID EMAIL ADDRESS MUST ACCOMPANY YOUR PROOF OF PAYMENT.

Upon receiving documentation, a confirmation email will be sent to you.

(1) One-time payment - A copy of transaction log from the lender providing proof that amount was paid to the lender. The names of the borrower and lender must be on the document to be considered valid.

(2) Monthly Payments - A copy of transaction log from the lender providing proof that amount was paid to the lender. The names of the borrower and lender must be on the document to be considered valid.

Email all Proof of Payments to:

studentdebttaxcredit.mhec@maryland.gov​.

or mail to:
Maryland Higher Education Commission

Student Loan Debt Relief Tax Credit

6 N. Liberty Street, 10th floor

Baltimore, MD 21201

Are you having problems with your student loan servicer?

If you have a complaint about your student loan servicer and need information on what steps you can take to resolve your concerns, you can contact the Maryland Student Loan Ombudsman at https://www.dllr.state.md.us/finance/consumers/frslombud.shtml

Student loan servicer problems that the Ombudsman can assist with include: failure by the servicer to communicate with a borrower, errors in crediting principal and interest payments, misapplied payments, inaccurate interest rate calculations, billing errors, loan consolidations or modifications errors, and/or inappropriate collection activity or tactics.​