Students and graduates all over the country are facing increasing tuition costs and a lot of student loan debt. This week, the Maryland Governor announced a plan to combat both of these growing problems. Governor Larry Hogan stated he will propose a new bill as part of a student loan debt relief plan.
The Current State
Currently, the law allows for students to deduct a maximum of $2,500 of student loan interest paid on a tax return for individuals earning an income of $80,000 (if single,) or $160,000 (if married and filing a joint return). People who earn between $65,000-$80,000 (if single) or $130,000-$160,000 (if married) claim a lower amount of the maximum $2,500 allowed.
Student Loan Debt Relief Plan
Beginning in 2018, all Maryland residents paying student loan interest would be able to deduct 100% of the total interest paid under the student loan debt relief plan proposed by Governor Hogan. Residents that make less than $200,000 (if single), or $250,000 (if married and filing a joint return) would be allowed to deduct 100% of their interest payment total from their tax liability bill.
Governor Hogan’s plan would also make attending college and universities more affordable for residents. With tuition rates predicted to rise by 5% in 2017 alone, Governor Hogan’s plan proposes a cap on tuition rate rises at 2%. It is estimated that this plan could save Maryland residents $20 million a year.
In efforts to address the critics of the plan who say colleges and universities will suffer under this legislation, Hogan plans to invest over $380 million for higher education projects such as construction projects for new buildings across many of the state’s institutions. The plan would also provide $56 million to community colleges to fund necessary construction and projects and scholarship funds over the coming years.