I’m Kayla, and yep, I used this credit myself. Twice now. If you’ve got loans and you live in Maryland, this thing can help. It’s not fancy. It’s just real money off your state taxes that you then throw at your loans.
And you know what? It worked for me.
If you want the blow-by-blow version, I published a complete diary of the application process on Occupy Student Debt—you can read it here.
So… what is it, in plain words?
- The Maryland Student Loan Debt Relief Tax Credit is a state tax credit run by MHEC (Maryland Higher Education Commission) (see the official program page).
- You apply by September 15 each year in the MDCAPS portal.
- If you’re picked, you get a credit amount (mine was $1,000 each year).
- It’s refundable, so if your tax bill is smaller than the credit, you still get the rest as cash back.
- You have to pay that amount toward your loans within two years and show proof.
That last part matters. They want to see you used it for your loans, not a new TV.
My real numbers
I finished grad school at Towson with about $36,400 in loans. As of last year, I still had around $18,900. My servicer is MOHELA. Interest sits at 6.1% on the biggest chunk.
Here’s my timeline from last year:
- August 28: I logged into MDCAPS and started the application. It asked for my loan totals, my servicer info, and my Maryland residency stuff.
- I uploaded a statement from MOHELA that showed my name, account number, total balance, and the interest rate.
- September 12: I hit submit (cutting it close… again).
- November 29: I got an email that I was awarded $1,000. The letter said to claim it on Maryland Form 502CR (there’s a Student Loan Debt Relief section). I saved that letter like it was gold.
- March 20: I filed my Maryland return. My state tax due was $317. The $1,000 credit covered that and sent me the leftover $683 as a refund.
- May 2: I made a $1,000 “principal-only” payment to MOHELA. I screenshotted the confirmation and saved the PDF statement.
- June 10: I uploaded proof back in MDCAPS. Done.
Could the amount be higher? Yes, some folks get more, up to $5,000. I’ve only seen $1,000 for me, but I didn’t mind. A grand is a grand.
Did it help, or was it just paperwork?
It helped. A $1,000 hit to principal at 6.1% saves me about $61 in interest over a year, and more over time. Not life-changing money, but it’s steady. And honestly, the app wasn’t that bad. I spent maybe 25 minutes on it.
What I liked
- It’s real, and it pays out. I got the refund even though my tax bill was smaller than the credit.
- Works with federal loans and (from what I’ve seen) private loans too, as long as they’re your loans.
- The MDCAPS portal looks old, but it didn’t crash on me.
- You can apply again next year if you still have loans. I did.
What bugged me a bit
- The portal makes you re-enter stuff you already typed before. Not a deal-breaker, just annoying.
- The award letter came late fall, which made me nervous. I refreshed my email like it was concert tickets.
- You must remember to pay the amount toward your loans and upload proof. They give you up to two years, but set a reminder. I used my phone and a sticky note. Both.
Who it’s best for
- Maryland residents with at least $20,000 in total student loans and at least $5,000 still left. That’s the bar I had to meet.
- Folks who went to school in Maryland may get a boost in priority. That’s what my letter hinted at.
- People who can handle a small paper chase and a deadline. It’s not hard, but you do have to do it.
The nuts and bolts (but said simply)
- Deadline: September 15 each year.
- Where: MDCAPS (that’s MHEC’s online portal).
- Paperwork: A recent loan statement with your name, balance, and servicer. Your Maryland address info. Your loan account number.
- Tax form: Maryland Form 502CR, Student Loan Debt Relief section (download it here). Attach the award certificate.
- After you file: Make a payment equal to the credit to your loans and keep proof. You’ve got up to two years to show it.
I used TurboTax for the state part one year and the Maryland free file the next. Both handled 502CR fine. The key is attaching the award letter. No letter, no credit.
A tiny digression that might help
My friend Jamal missed the deadline by two days. He figured they’d flex. They didn’t. He had to wait a full year. Another friend moved to Northern Virginia and tried to claim it. No go. You’ve got to be a Maryland resident for the tax year you claim.
What I’d do if I were you
- Set a calendar alert for August 15 and September 1.
- Download a clean, recent statement from your servicer. Make sure it shows your full name, the total balance, and the account number.
- When you get the credit, make a principal-only payment and save the receipt as a PDF.
- Keep a tiny folder: “MD Loan Credit.” Toss your letter, statement, and proof in there.
- If you’re not sure about something, call MHEC. I waited on hold for 12 minutes and got a straight answer about my consolidation loan being fine.
If your situation feels messier than mine, see what happened when one borrower hired a student debt attorney to untangle the fine print.
For additional ideas on shrinking your balance and staying motivated, swing by Occupy Student Debt — their plain-English guides and updates can give you an extra edge. They even reviewed off-beat options like the Charles Cheesman's Student Debt Reduction Scholarship if free-money hunting is more your vibe.
Even if you’re laser-focused on repayment, life isn’t all spreadsheets and loan statements. Maybe you’re planning a study-abroad semester or a budget-friendly post-grad trip to France—social life included. In that case, you can check out the no-pressure, student-friendly dating scene spotlighted at PlanCul Marseille. The resource rounds up free sign-up events and casual meet-ups around the city, helping you meet new people without blowing the entertainment budget you’ve earmarked for extra loan payments. If you ever find yourself on the West Coast visiting friends near Puget Sound, you can get the same low-cost, meet-new-people vibe through local speed-dating nights listed at Speed Dating Bremerton, where you’ll see upcoming event dates, pricing, and easy RSVP options so you can socialize without splurging.
The bottom line
This credit won’t wipe your loans. But it gave me $1,000 each year to push the balance down faster. It was simple, it was fair, and it took less time than my weekly grocery run at Giant.
Would I do it again? Yep. I set my reminder already.
Small note: this is my experience from the last two tax years. Rules can shift, and amounts vary. But if you live in Maryland and carry student loans, this one’s worth a shot.