Michael J. Gollob, CPA
Student loans are a burden on many Americans, but thankfully there is a way to retrieve a portion of the money spent on the interest payments. For the interest on qualified education loans, the maximum deduction allowed for the taxable year is $2,500.
Full Deduction < $70,000
No Deduction > $85,000
Full Deduction < $145,000
No Deduction > $175,000
Source: Fidelity.com
You could be eligible for student loan debt relief. If you received the Federal Pell Grant, you are eligible for up to $20,000 in relief and $10,000 for non-Pell Grant recipients. According to Federal Student Aid, if you’re an individual that made less than $125,000 in 2020 & 2021 or families that made less than $250,000 in 2020 & 2021, you are eligible for loan forgiveness. The application takes less than 5 minutes to complete and does not require submitting any documentation. For more information on student loan forgiveness, click here: https://studentaid.gov/manage-loans/forgiveness-cancellation
As of 10/21/2022 student loan forgiveness has been halted but is expected to resume in the upcoming weeks.
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