Claiming interest paid on student loans if loan is in forbearance

[predodoc]

Im a resident and my loans are in forbearance. I paid about 2k last year toward my loan of which about $400 went to interest and rest went to principal. I wasnt required to pay but I wanted to keep some of the interest from capitalizing, ect.
My question is can I claim the $400 I paid as interest on student loans. I know this sounds obvious but I found a fine print that says dont include interest you were not required to pay. I take that as.. Im still required to pay it, just not right now. My wife takes it as.. you werent required to pay at that time since in forbearance so dont include it.
It only takes about $60 bucks off my refund if I dont include it but hey,,,60 bucks is 60 bucks.
Anyone know the answer?

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[penguin24]

If the money shows up on the Tax Form 1098-E, then you can claim it. You log onto the Financial Aid website and there should be a link to the tax form. The number it says on that form is what counts.

 

[dpmd]

When in doubt always go to www.irs.gov and look at the applicable publication. They usually spell things out in ways that should clear up confusion for a variety of things. In this case it was completely clear that you can take the deduction (from pub 970):

Voluntary interest payments. These are payments made on a qualified student loan during a period when interest payments are not required, such as when the borrower has been granted a deferment or the loan has not yet entered repayment status.
Example.

The payments on Roger's student loan were scheduled to begin in June 2008, 6 months after he graduated from college. He began making payments as required. In September 2009, Roger enrolled in graduate school on a full-time basis. He applied for and was granted deferment of his loan payments while in graduate school. Wanting to pay down his student loan as much as possible, he made loan payments in October and November 2009. Even though these were voluntary (not required) payments, Roger can deduct the interest paid in October and November.

 

[predodoc]

When in doubt always go to www.irs.gov and look at the applicable publication. They usually spell things out in ways that should clear up confusion for a variety of things. In this case it was completely clear that you can take the deduction (from pub 970):

Voluntary interest payments. These are payments made on a qualified student loan during a period when interest payments are not required, such as when the borrower has been granted a deferment or the loan has not yet entered repayment status.
Example.

The payments on Roger's student loan were scheduled to begin in June 2008, 6 months after he graduated from college. He began making payments as required. In September 2009, Roger enrolled in graduate school on a full-time basis. He applied for and was granted deferment of his loan payments while in graduate school. Wanting to pay down his student loan as much as possible, he made loan payments in October and November 2009. Even though these were voluntary (not required) payments, Roger can deduct the interest paid in October and November.

Thanks so much for clearing that up for me. You just helped put money in my pocket!

 

[dpmd]

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