This time the state Senate committee heard a testimony about a possible student loan tax break for state residents. The proposal would save Maryland residents a combined $20 million a year.

 

Maryland is looking to help their residents with student loans once again. This time the state Senate committee heard a testimony about a possible student loan tax break for state residents. The proposal would save Maryland residents a combined $20 million a year.

Gov. Larry Hogan’s initiative, Student Debt Relief Act, would provide tax deductions to Maryland residents struggling to pay off student loans. The act would allow individual borrowers making less than $200,000 a year and couples making less than $250,000 a year combined to deduct 100 percent of interest paid on their student loan debt from their state income taxes.

“By 2020 nearly 70 percent of the jobs in Maryland will require a college degree,” Cassie Shirk, a special assistant in Hogan’s legislative office, said. “But the harsh reality that many students face is that earning a college education goes hand-in-hand with accumulating student debt.”

Maryland has an average student loan borrower debt of $27,687 according to a LendEDU report. The report also states that 50 percent of graduates in the state leave with student loan debt and there is a default rate of over 5 percent.

As of now, federally, student loan borrowers are already eligible for a federal student loans tax break on the interest. If you have student loans you can currently receive deductions of up to $2,500 of your student loan interest which results in a maximum of $625. With the addition to being able to deduct more than that for your state taxes, there could be a huge boost for borrowers.

“When you’re dealing with a bunch of people who literally live paycheck to paycheck while they’re trying to get started in their lives and get self-sufficient in their jobs, every little bit helps,” Matt Williams, a student at the University of Maryland University College, said. It is a tough time for borrowers entering repayment as a young generation looking to be able to afford basic life necessities. It can be nearly impossible to pay back student loans, they can be more of a brick wall instead of a hurdle for young borrowers.