HomeNewsThousands of Americans Eligible for $9 Million in Additional Tax Credits: What to Know

Thousands of Americans Eligible for $9 Million in Additional Tax Credits: What to Know

by TK Sanders
(Photo Illustration by Scott Olson/Getty Images)

Governor Larry Hogan of Maryland just announced another $9 million in tax credits Wednesday. The program, known as the Maryland Student Loan Debt Relief Program, began in 2017. It has handed out over $40 million in credits in those five years; and apparently will continue into the near-future.

Recipients of the credit can fall into either one of two camps: Maryland residents who left the state for college but moved back home, or anyone who chose to attend university in Maryland. The program recognized about 9,000 graduates last year with a credit grant.

Marylanders must present at least $20,000 in original student loan debt, on top of at least $5,000 in current student loan debt remaining to qualify for the program. The application period last from June 1 of this year through September 15, and applicants who applied in the past will receive priority.

Tax credits versus stimulus payments

Because the program exists as a credit, qualified college grads won’t actually receive any physical money. They write the amount off of their taxable income, instead. If the write-off leads to a positive balance on their tax returns, the Maryland government will then issue a cash refund. Otherwise, you’re basically just keeping money that you’ve already earned throughout the year.

However, beneficiaries must be able to prove that the money saved actually went towards student loan debt. Failure to do so could lead to reclaimed funds by the state — and a debt balance that never really moved after all.

“Programs such as this allow for greater opportunities for our students and expanded options to assist with student loan debt,” Governor Hogan said. “Especially during this time when people are being squeezed by higher costs.”

Some debt programs are actually administered by schools, themselves

The Morehouse School of Medicine in Atlanta decided to give students over $6,000 in education grants. Meharry Medical College of Nashville distributed a $10,000 grant to most of its students, too. Also, Florida State just released a staggering $17.7 million to its 16,000 undergrad students in the fall to help with everyday school expenses.

These schools did not specify the source of the funds used for these grants. Some of it may have come directly from the federal government. Biden’s administration released around $40 billion in funding to various institutions as part of the American Rescue Plan.

Any sort of debt relief sounds like a good plan for many Americans. A new report estimates that the average family owes somewhere around $150,000 between various loans and credit card debt. According to the metrics, the cost of living in America rose 7 percent year over year. However, the median income actually fell 3 percent over the same time.

The estimated total amount of consumer debt in America is around $15 trillion.