Hello, this is Governor Janet Mills and thank you for listening.
Well, earlier this week, the federal government -- the Department of Education -- announced that it will be restarting collections on overdue student loan payments, which had been paused for the last five years.
If you have student loan debt, you might be kind of worried about your ability to pay it off. You may also not know that there's a simple state tax credit here in Maine that could save you thousands of dollars on your loans. So let's talk about it.
When I took office, Maine was projected to lose 65,000 workers by the year 2030 as older people retired and too few young people entered the labor market. Well, to encourage more young people to start careers in our state after they graduate from school, we made Maine's student loan relief programs less complicated and more generous. In fact, it's the most generous one in the country.
For tax years beginning on or after January 1, 2022, graduates can receive an income tax credit for their student loan payments of up to $2,500 a year or up to $25,000 over their lifetime. Unlike our old tax credit that had a lot of complicated criteria, our new student loan repayment tax credit is simple and straightforward. Basically, if you graduated from school any time after 2007 with a degree in any subject, from any accredited community college, college, or university anywhere, and you now live in Maine and pay income taxes in Maine, then you'll qualify.
I've read that about 190,000 people in Maine owe a collective $6.5 billion all told in student loan debt. That's about an average of $34,000 each. Well, if you're one of those graduates and if you're paying down your student loan, you could claim this student loan repayment tax credit on your state taxes and you could knock out as much as $25,000 of that debt over time.
Student loan debt is a real burden that could hold people back from living here in Maine. If graduates keep leaving for jobs in other states, our economy just won't grow. With the federal government restarting collections on overdue student loans, I strongly encourage you to consider claiming Maine's student loan repayment tax credit. If you didn't take it in previous tax years or if you forgot to take it when you filed your 2024 return and you were paying on a student loan, you can still file an amended return.
The strength of our economy here in Maine depends on keeping talented people working in our state. There's a simple, generous, and clear tax credit to help you pay down your student debt and start or continue a career in Maine. Take advantage of it today, won't you?
For more information about the Student Loan Repayment Tax Credit, please visit maine.gov/revenue. That's maine.gov/revenue.
This is Governor Janet Mills and thank you again for listening.