Governor Hogan Announces Tax Year 2020 Award of $9 Million in Tax Credits for Student Loan Debt

Governor Larry Hogan and Maryland Higher Education Commission (MHEC) Secretary Dr. James D. Fielder announced nearly $9 million, in tax credits, was awarded to nearly 8,000 Maryland residents with student loan debt.

“As student loan debt continues to be exacerbated by the COVID-19 pandemic, innovative programs like the Student Loan Debt Relief Tax Credit offers Maryland taxpayers an additional option to help pay off their student loan debt while remaining a valuable member of the state’s workforce,” said Governor Hogan.

Maryland taxpayers who have incurred at least $20,000 in undergraduate and/or graduate student loan debt and have at least $5,000 in outstanding student loan debt are eligible to apply for the Student Loan Debt Relief Tax Credit.

There were 7,962 applicants who were eligible for the Student Loan Debt Relief Tax Credit. The tax credits were divided into two groups of eligibility, including Maryland residents who attended a Maryland institution and Maryland residents who attended an out-of-state institution. There were 4,995 eligible applicants who attended Maryland institutions and will each receive $1,210 in tax credits, while 2,967 eligible applicants attended out-of-state institutions and will each receive $982 in tax credits.    

“Despite the challenges of the pandemic, MHEC’s staff remains committed to engage, inform, and support our students about the numerous programs available to them, providing student success with less debt,” Secretary Fielder said. “This program is one of 26 state financial aid programs administered by MHEC to help reduce student loan debt.”

The tax credit is claimed on the recipient’s Maryland income tax return when they file their Maryland taxes. If the credit is more than the taxes owed, they will receive a tax refund for the difference. For example, if $800 in taxes is owed without the credit, and a $1,000 Student Loan Debt Relief Tax Credit is applied, the taxpayer will get a $200 refund.

Under Maryland law, the recipient must submit proof of payment to MHEC, showing that the tax credit was used for the purpose of paying down the qualifying student loan debt.

To learn more about the program, go to​

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