Can student loan interest be used as a tax deduction if the loans are in deferment/forbearance?

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Posted by admin in January 10th 2009

AG asked:

I know that student loan interest can be deducted.

My student loans are all either in deferment or forbearance. I’m accruing interest on some of them, but I haven’t actually paid any interest yet. Can I deduct the interest that accrued?

Thanks!

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7 Comments Received

v b
January 12th, 2009 @1:37 pm

$0 paid, $0 deductible.

TaxGurl
January 14th, 2009 @5:02 pm

You can only deduct interest that you actually PAID during the tax year, not the interest that is accruing. Sorry to be the bearer of bad news but you have to wait until you start making payments on the loans to be able to take a deduction for any of the interest.

Judy
January 16th, 2009 @5:12 pm

No, you can only deduct the interest when you actually pay it, not when it accrues