The IRS provides tax breaks for individuals who have student loans in repayment status. You may be able to deduct up to $2,500 of the interest you paid.
Visit www.irs.gov for specific tax-related information.
If you have having trouble making payments, contact your loan servicer immediately. They have several options that may help. You may qualify for a deferment or forbearance. Several different repayment plans exist that may lower your monthly payment.
Deferment A deferment is an approved temporary suspension of loan payments based on certain events or criteria. A deferment enables borrowers, under certain conditions, to postpone loan repayment for specified periods of time. You must apply for a deferment through your loan servicer. If you have a subsidized Stafford Loan or Perkins Loan you will not accrue interest during a deferment. If you have an unsubsidized Stafford Loan, you are responsible for the interest during the deferment. You can make interest payments or choose to have the interest capitalized. You must continue to make payments on the loan until you are notified that the deferment has been approved.
Forbearance Forbearance is a temporary postponement or reduction of payments for a period of time because you are experiencing financial difficulty. You can receive forbearance if you are not eligible for a deferment. Unlike deferment, however, interest accrues, and you are responsible for repaying it. A forbearance is granted in increments of one year. You must apply for forbearance with your loan servicer. You must continue to make loan payments until you have been notified that the forbearance has been granted.
Repayment PlansStudent loan repayment schedules fall into one of three categories: