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In the interest of borrowers – making sure they claim loan interest deductions
January 26, 2017
It's once again time for all of us to do that giant math problem known as filing our taxes.
If you are a borrower paying back federal student loans, you may be eligible to deduct a portion of the interest paid on your 2016 federal tax return.
The Office of Federal Student Aid (FSA) in the Department of Education last week posted an Electronic Announcement, asking the financial aid community to help share information to borrowers about the reporting of student loan interest payments.
Borrowers that paid $600 or more in interest in 2016 should receive an IRS Form 1098-E from their servicer by January 31, 2017. The form lists the exact amount of interest they paid on their student loans. Those borrowers that paid less than $600 should contact their servicer for information on the amount of interest paid.
In some cases, borrowers will have multiple servicers. If the borrower paid more than $600 in interest to each individual servicer, he or she will receive an IRS Form 1098-E from each servicer. If the interest paid to each individual servicer is less than $600, but totals more than $600, the borrower can request a 1098-E from each of his or her servicers.
If needed, borrowers (or financial aid professionals who are assisting borrowers) can access the National Student Loan Data System (NSLDS) to get servicer information.
Servicers that send information to borrowers may do so either electronically or via postal mail. Borrowers who had loans previously serviced by VSAC Federal Loans will receive a 1098-E from Nelnet.
Student loan borrowers can find more information about tax credits and deductions for education on Mapping Your Future.