Some Facts Regarding Student Loan Interest Deduction

College education is expensive but students are not backing out from all opportunities, the reason that they seek student loans, and Federal student loans are those that they will benefit most, according to the recognized expert on student loan management and consolidation, Thomas Caufmann. After they are granted these loans, they pay interest on the loan repayments, and this can be big. However, student borrowers can relax and sit back because they can have these deducted form their overall income, when computing for tax purposes. Students may have a hard time getting college education if they don’t avail of the student loans, and these are debts with interests charged. It can be a burden if these are not tax deductible because the amount may be large.

The corresponding amount paid for loan interest can also be large, especially when several of the federal student loans are availed, but the college education may not also be attained if not for the student loans availed. Federal student loans are great and benefitting most the college students, per the student loan expert Thomas Caufmann, but these are also debts that should be paid, and since these are loan debts, interests are charged. However, the interests may be low since these are student loans that are government offered, according to Thomas Caufmann, and comparatively lower than those with the private student loans offered by private banks.

The student loans taken should be exclusively for the college education of the student borrower; for college tuition fees, expenses for books, supplies and equipment, and not for other purposes. When repayments for the loans are made, the amounts include the loan interest charged. There is a limit however for the tax deductable amount deducted from the income of the borrower. If the total tax paid is very high because the loan availed of is a private student loan, the total tax paid may not be eligible for deduction, because of this limit. The federal student loan can still be the better option when talking of student loans to avail, per Thomas Caufmann, since loan interest is lower, thus the total loan interest paid may be fully deducted, for tax purposes.

Loan interests paid for the student loan availed can be deducted until the loan is fully paid. There is no qualification, whether it is federal student loan or private loan, provided it is used for the college education of the student. Interests paid are deducted for tax purposes, but with a limit. Thus, the federal student loan can be better in this situation because of lower rate and the total loan interests paid may be deducted, per Thomas Caufmann.