Friday, July 3rd, 2009
Do I get tax credits for student loan interest while still in school and the loan is in 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?
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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July 6th, 2009 at 2:28 am
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.