There is good news for Marylanders who have incurred student loans to finance their
higher education. The Maryland Student Loan Debt Relief Tax Credit offers eligible
residents up to $5,000 in tax relief for the 2025 tax year to help pay down student loan
debt. Administered by the Maryland Higher Education Commission (MHEC), the
program is open to full- and part-year Maryland residents who have incurred at least
$20,000 in undergraduate or graduate student loan debt and still owe at least $5,000 at
the time of application. Recipients must use the awarded credit to repay student loans
within three years and provide proof to avoid recapture by the state.
To be eligible for the Maryland Student Loan Debt Relief Tax Credit for the 2025 tax
year, applicants must meet the following criteria:
Residency: Be a full-year or part-year Maryland resident for the 2025 tax year 1
Loan Requirements: Have incurred at least $20,000 in undergraduate and/or graduate
student loan debt and have a minimum of $5,000 in outstanding student loan debt at the
time of application.
Educational Background: Loans must be for degrees earned from accredited institutions
(associate, bachelor’s, master’s, doctoral, etc.). Applicants must provide transcripts
showing the degree earned and date conferred 2.
Tax Filing: Must have filed a Maryland state income tax return (Form 502) for the most
recent prior tax year,
Applications are accepted from July 1 to September 15, 2025, and typically take 15–30
minutes to complete 3. The average award is around $1,800, and recipients must use
the funds to repay their student loans within three years and provide proof of payment to
avoid repayment to the state. Supporting documentation includes lender statements,
Maryland tax returns, and transcripts. Awards are prioritized based on criteria outlined in
Maryland law, and recipients will be notified by December 2025. The program is funded
with $9 million for 2025, down from $17 million in 2024, and about 85% of applicants
received funds last year.
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