Tax deductions on Unsubsidized loans

[thanotoriousfob]

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Once I graduate and start working, is it possible to get tax deductions on unsubsidized loans if I defer payments during optometry school?

Also, I have heard people say you should pay (if you can) the interest accrued from unsubsidized loans while in school and I heard others say the opposite and to instead, invest in money markets, CD's, bonds, etc.

Does anyone have any advice on which route would be more financially sound?

I've never received money from an unsubsidized loan so I am somewhat confused on capitalized interested and the whole process.

Thanks.

 

[KHE]

Once I graduate and start working, is it possible to get tax deductions on unsubsidized loans if I defer payments during optometry school?

Also, I have heard people say you should pay (if you can) the interest accrued from unsubsidized loans while in school and I heard others say the opposite and to instead, invest in money markets, CD's, bonds, etc.

Does anyone have any advice on which route would be more financially sound?

I've never received money from an unsubsidized loan so I am somewhat confused on capitalized interested and the whole process.

Thanks.

I would ask a tax professional but in general, student loan interest deduction can be taken on interest that is actually paid. So from that standpoint, you would be better off to defer paying it until you graduate when you actually have some income to write it off against.

Also, I would not worry about paying interest or fretting about student loans while in school. If you have extra money, save it away for the future and try to avoid other consumer debt like credit card or higher interest lines.