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December 8, 2025

"Nation-leading program created by the Governor provides people who live and work in Maine a refundable tax credit for student loan payments of up to $2,500 annually"

Governor Janet Mills announced today that her student loan relief program--one of the most generous in the nation--has provided more than $140 million in debt relief to Maine people with student loans since its creation three years ago.

In 2022, Governor Mills proposed -- and the Legislature approved -- a major overhaul of Maine's student loan tax credit to make it more generous and easier to use and to help retain and attract young workers to Maine and encourage those here already to stay. Eligible Maine residents can be reimbursed through their state tax return for up to $2,500 of the student loan payments made during the previous year, which means the State will effectively cover the cost of a working resident's monthly student loan payment of up to $208.

Under the program, relief to Maine student loan borrowers has effectively doubled -- from $32.5 million in tax relief to 14,308 taxpayers in 2022 to $45.3 million to 26,071 taxpayers in 2023, to $62.3 million to 29,751 taxpayers in 2024. As people think about preparing their income tax returns next year, Governor Mills and state leaders are encouraging student loan borrowers to learn more about the credit to maximize their tax savings before the end of December.

"It's become tougher and tougher everywhere in America for young people to afford housing, health care, and groceries. Carrying a load of student debt makes it tougher to make car payments and put money down on a house and start a family. My Administration wants to make it easier for young people to live and work in Maine, and that's why we've created initiatives like our student loan repayment program," *said Governor Mills*. "This tax credit helps lighten the burden on Maine people paying student loan debt, giving them more flexibility to buy a home, start a family, and contribute to the growth of our state. This is a great program, and I urge all eligible Maine people to take full advantage of this generous, nation-leading credit."

The program's tax credit of up to $2,500 annually offsets some or all the taxpayer's state income tax, with the balance fully refundable. For example, a taxpayer who owes the State of Maine $500, but who made $2,500 in eligible student loan payments during the year, would receive a tax refund of $2,000. The program provides $25,000 over the lifetime of an individual taxpayer. A married couple both making student loan payments can claim up to $5,000 annually for a lifetime total of $50,000.

"This is one of the most generous programs you'll find anywhere in the country, and it's absolutely great for Maine's economy," *said Economic & Community Development Commissioner Mike Duguay*. "Helping Maine people knock down their student debt is not only good for families -- it gives our employers a real edge in recruiting and retaining talented employees right here in Maine. And by investing in our students, we ensure a greater return in the form of a stronger, larger talent pool that will power Maine's economy for years to come."

"It is imperative that we make Maine an economic opportunity for every generation, but especially those who are starting a career here in Maine. The Student Loan Repayment Tax Credit has been a key method of improving the student loan challenge of an entire generation and the Maine State Chamber of Commerce applauds this milestone that is the result of leadership from Governor Mills and Maine employers to make this credit workable for thousands of Mainers who are choosing Maine as a home and a career," *said Patrick Woodcock, President & CEO of the Maine State Chamber of Commerce*.

"We applaud the Mills Administration and the Legislature for streamlining the Student Loan Repayment Tax Credit, which leverages the region-leading affordability of our public universities to recruit and retain more top talent to study, live, work and grow the economy in our great state," *said University of Maine System Chancellor Dannel Malloy*. "As one of Maine's largest employers, the simplified tax credit is also a valuable tool for us to attract employees to work in our System and serve our students and our state."

"The Maine Student Loan Repayment Tax Credit is more than financial relief -- it's a powerful incentive to build a future right here at home in Aroostook County. This program reduces the burden of student debt and helps our region attract and retain the talented young people who fuel our workforce, our communities, and our economy," *said Kiersten Purington, President and CEO of the Aroostook Partnership*. "By easing the path from education to career, this tax credit ensures that student loans are not a barrier for those seeking to live, move, or return to rural Maine communities. It strengthens Northern Maine and invests in the next generation of leaders who will shape our future."

"The Student Loan Repayment Tax Credit has become a powerful and effective workforce tool, helping keep homegrown talent in our state and making Maine companies more competitive in attracting top-tier candidates from around the country,"*said Quincy Hentzel, President and CEO of the Portland Regional Chamber of Commerce*. "The Chamber proudly supported Governor Janet Mills' effort in making this credit simpler and more generous, and these results prove those reforms are working."

The Governor's Student Loan Repayment Tax Credit replaced the former Educational Opportunity Tax Credit (known as "Opportunity Maine"), which had become confusing following a patchwork of legislative changes that provided benefits that varied according to a graduate's degree, graduation year, and educational institution. The Student Loan Repayment Tax Credit is available to anyone who completed an associate, bachelor's, or graduate degree after 2007 who is repaying their student loans, working at least part-time, and living in Maine. Last year was the first full tax year since the adoption of the credit that Federal loan borrowers were required to resume paying loans after a pandemic-era federal pause.

"Reforming the Maine Opportunity Tax Credit into the newly named Student Loan Repayment Tax Credit was one of the most important initiatives I sponsored during my twelve years in the Maine legislature. When we first took up this years-long effort, Maine was facing a shrinking workforce, rising student debt burdens, and a tax credit that was so complex almost no one could use it. We set out to fix that and I'm incredibly proud that the bipartisan overhaul we championed has now saved Mainers more than $140 million and doubled participation,"*said former State Senator Matt Pouliot, lead sponsor of the Student Loan Repayment Tax Credit reform*. "This is exactly what public service should be about: identifying barriers, simplifying government, and putting real money back into people's pockets so they can build their lives and careers here in Maine. Seeing the success of this program is deeply gratifying, and it reaffirms why we fought so hard to get it across the finish line."

"As a young Mainer starting my career as an occupational therapist, this tax credit has made my student debt much more manageable," *said Kylie Boivin of Lewiston*. "That has made it easier for me to stay in Maine and raise my family here. I'm incredibly grateful to Governor Mills for championing a credit that supports young families like mine."

"As two professionals with graduate degrees and student loans, we were thrilled to learn about the Student Loan Tax Credit from Live and Work in Maine -- and even amended previous year's taxes. The state's tax credit helps close the gap between income and expenses, supporting our goal to stay in Maine long-term and offering real relief in uncertain times," *said Dan Evans and Cecilia Flatley of Oxford County*.

During her first year in office, Governor Mills released [ [link removed]*:*:text=Innovation%20&%20Attracting%20Talent-,Governor%20Mills%20Unveils%20Ten%20Year%20Strategic%20Economic%20Development,on%20Promoting%20Innovation%20&%20Attracting%20Talent&text=Searsmont&%20MAINE%20**C20Calling%20the%20growth,year%20strategic%20economic%20development%20plan. ] Maine's first long-term economic strategy in decades, focused on replacing the 65,000 workers projected to age out of Maine's workforce by 2030 by growing new talent and attracting new workers. The strategy identified streamlining the student loan tax credit as a major workforce attraction for use by Maine employers.

"The Maine Student Loan Repayment Tax Credit gives graduates a powerful incentive to start their careers with a Maine-based employer. By offering up to $2,500 each year in student loan repayment savings, it helps make Maine an appealing place to live and work after college," *said Michael Bolanz, Director of Talent Acquisition at MaineHealth*. "The talent team at MaineHealth regularly highlights this program when talking with students and recent graduates about career opportunities. It's a meaningful advantage that sets local employers apart, helping new hires manage their debt while building their future in a state that genuinely values their talent."

To qualify for the tax credit, individuals must be Maine residents who have earned an associate, bachelor's, or graduate degree after 2007, have earned income above a threshold based on the state minimum wage, and have made required payments directly to their student loan servicer during the period they lived in Maine. Loans taken out by parents or relatives on behalf of a student, employer-based loan arrangements, and certain other non-qualifying loans are not eligible. First-time claimants must provide documentation, including proof of degree and records of eligible loan payments.

Student loan borrowers in Maine who are interested in learning more about the Student Loan Repayment Tax Credit are encouraged to visit the website of Live + Work in Maine [ [link removed] ], a nonprofit organization dedicated to connecting individuals to employers and communities in Maine. On their website [ [link removed] ], borrowers can find eligibility information and FAQs about the credit, links to official State resources for income tax filing, and sign-up to receive email reminders for when 2025 tax forms for the credit become available.

Since taking office, Governor Mills has made record investments to make the cost of education more affordable in Maine. In 2022, the Governor proposed, and the Legislature approved, making two years of community college free for recent high school graduates. The program has led to record enrollment in community college system.

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