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Maine’s Answer to the Student Loan Crisis

Matthew Arey, JD*, Retirement Advisor, director of fiduciary services

Workers across the country cite financial stress as a leading factor of “presenteeism” in the American workforce. Student loan debt remains one of the foremost causes for delayed and inadequate early funding of retirement plan savings. At Lebel & Harriman, we understand the peace of mind that security retirement savings provide to employees, and the resources available to address student loan debt.

To help our retirement plan sponsors, and encourage more participant savings, Lebel & Harriman would like to share information. This is regarding student loan debt assistance programs and the federal and state repayment options, tax-credits, and loan forgiveness.

Maine is a thought leader when it comes to student loan repayment options. In 2008, 36 M.R.S. Section 5217-D was enacted to help students repay their educational loan debt. The law was enacted, in part, to help the state stem the exodus of highly qualified students. For instance, programs include the Lifetime Learning Tax Credit (LLTC) and the American Opportunity Tax Credit (AOTC) are both useful federal tax credits for taxpayers with educational expenses.

In addition, the Maine Opportunity Tax Credit offsets an individual’s state income tax liability for qualified payments to a student loan lender.

The Maine Opportunity Tax Credit eligibility requirements are complex. In general, you may be eligible if you obtained an associate or bachelor’s degree from a Maine institution of higher education. You also need live and work in Maine, and you make qualified loan payments. If eligible, you may qualify to have up to $377 dollars per month ($4,524 annually) of your student loan payments offset your Maine Income Tax liability. MOTC is also available to for-profit employers and may provide substantial opportunities for recruiting, retention, reducing employee education debt and lowering taxes.

Lebel & Harriman does not provide tax or legal advice. Individuals interested in more information regarding federal tax deductions and credits should seek guidance from a tax adviser. Likewise, individuals seeking assistance with the Public Service Loan Forgiveness (PSLF) should contact either their student loan servicer or the Department of Education.

To learn more about these programs, contact Matthew Arey, JD*, Retirement Adviser at Lebel & Harriman, at 207-773-5390. To read more about the Maine Opportunity Tax Credit please visit:

*Matthew does not provide legal services for clients and he is currently not licensed to practice law. Attorney-Client privilege does not apply to communications. Lebel & Harriman is not a law firm. The information contained in this email, including its attachments, is not protected information and may be subject to disclosure to the full extent of the law.

The information presented here is for educational purpose only and is not intended to provide specific advice or recommendations for any individual nor does it take into account the particular investment objectives, financial situation or needs of individual investors. The information provided has been derived from sources believed to be reliable, but is not guaranteed as to the accuracy and does not purport to be a complete analysis of the material discussed. This material is not intended to provide, and should not be relied on for tax advice. Any tax advice contained herein is of a general nature. You should seek specific advice from your tax professional before pursuing any idea contemplated.

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