Submitted by Jason Paskowitz (not verified) on May 24, 2008 - 8:04pm.
Fitting in with my theory that draconian collection practices and hatred for the middle class which go along with right-wing influenced policy on student aid is something else which doesn't get discussed often: Capitalized interest is also deductible as interest paid on student loans (as long as you make at least one payment per year). The only place that SLM Corporation and others tell you about this is indirectly, on the Annual Interest Statement you get in the mail. Correction -- the Statement you get in the mail ONLY if you paid $600 or more in interest per year. Also, if your loan was issued before 2004, they don't have to list the capitalized interst at all. Oh, and if you make more than $130k a year for a married couple -- an upper-middle class but by no means lavish lifestyle -- then the interest deduction is phased out. Seems like Congress really went out of its way to ensure that this tax deduction is not very well-known. For more information, see IRS Publication 970.
Jason Paskowitz, NJ State Lead, StudentLoanJustice.org.
Another interesting thing...
Fitting in with my theory that draconian collection practices and hatred for the middle class which go along with right-wing influenced policy on student aid is something else which doesn't get discussed often: Capitalized interest is also deductible as interest paid on student loans (as long as you make at least one payment per year). The only place that SLM Corporation and others tell you about this is indirectly, on the Annual Interest Statement you get in the mail. Correction -- the Statement you get in the mail ONLY if you paid $600 or more in interest per year. Also, if your loan was issued before 2004, they don't have to list the capitalized interst at all. Oh, and if you make more than $130k a year for a married couple -- an upper-middle class but by no means lavish lifestyle -- then the interest deduction is phased out. Seems like Congress really went out of its way to ensure that this tax deduction is not very well-known. For more information, see IRS Publication 970.
Jason Paskowitz, NJ State Lead, StudentLoanJustice.org.