Student loan repayments could reduce tax bill
Experts noted that student loan borrowers currently repaying their loans may be eligible for a tax break.
Between March 2020 and October 2023, the pause on student loan bills also prevented many borrowers from accessing student loan-related tax deductions, according to a news report from CNBC. However, borrowers may now quality for the student loan interest deduction, which allows them to deduct up to $2,500 per year in interest paid on private and federal student loans if they’ve made a full year’s worth of payments. This deduction does not require borrowers to itemize their taxes to make the claim. Instead, they will only need to provide a copy of form 1098-E — which reports interest payments for the 2024 tax year.
Student loan borrowers were encouraged to reach out to financial advisors to see if they qualify for the student loan interest deduction.
Read more: CNBC
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