Friday, July 3rd, 2009

Do I get tax credits for student loan interest while still in school and the loan is in deferment?

student loan deferment
Al asked:


I am currently a graduate student. I have a few unsubsidized student loans that are still in deferment. Should I be able to deduct the interest that is accumulating on the loan now, or am I only able to count that when I am actually makign payments on the student loan?

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One Response to “Do I get tax credits for student loan interest while still in school and the loan is in deferment?”

superstar_81882 Says:

You qualify for the student loan interest deduction only if you actually made a payment toward student loan interest during the tax year in question. The lender would send you a statement at the end of the year that shows your total interest paid.

If your loans are deferred, although they are still accruing interest because they are unsubsidized, you are not actually making any payment toward that interest. Therefore, you would not qualify for that deduction.

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