Student Loan Debt Relief Tax Credit Process:
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
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.
Upon being awarded the
tax credit, recipients must:
Use the credit within
two years to pay toward their college loan debt; and
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
If you have questions,
please view the Frequently Asked Questions.pdf for more
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
Documentation of Proof of Payment:
A VALID EMAIL ADDRESS
MUST ACCOMPANY YOUR PROOF OF PAYMENT.
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.
For 2019 tax credit awards, log onto your OneStop account and attach your Proof of Payment there.
For tax credit awards that precede tax year 2019, email your Proof of
or mail to:
Maryland Higher Education Commission
Student Loan Debt
Relief Tax Credit
6 N. Liberty Street,
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.
6 North Liberty Street, Baltimore, MD 21201
Phone: (410) 767-3300
Toll Free: (800) 974-0203 (If calling outside of the Baltimore City area)