Hacks to Get Motivated to Repay Your Student Loans

by | Jun 13, 2018 | #Millenniallife, Mindset, Money Matters

Last week’s article discussed the normal cycle of motivation while repaying your student loans.  If you’re looking to ramp up your motivation, today’s post will give you a few hacks to get from where you are to where you want to be. I’ll also share my journey through the stages of motivation.

 

Estimated read time ~ 8 min. Estimated watch time at 1.5x speed ~ 5 minutes

Hack#1

 

Pursue your curiosity and allow yourself to learn information without being obligated to take action.

Early on, borrowers often feel a huge weight of indecision. There’s too much information out there and it seems impossible to make a choice. By approaching learning with a sense of curiosity and no obligation to take action, you can look into the stuff you’ve been wondering about and start to learn and piece together the world of student loan debt. When you remove the pressure of action you aren’t crippled by the possibility of making an incorrect choice, because you’re not making a choice, you’re simply gathering information.

 

Hack#2

 

Make a decision about what you’re going to do with your student loans.

 

Once you’ve started collecting information you’re in the preparation phase. In order to move into the action phase a decision needs to be made. You’ll have to decide what exactly it is you want to do with your student loans.

 

If you don’t know what you want to do with your student loans, it’s going to be tough to take actions that land you in an ideal repayment situation. It’s OK to have one or two different options that you can start taking actions on. Your actions on both will help you move toward either choice and may help you finally decide which one is best.

 

Hack#3

 

Develop a plan that you can financially sustain and consistently work toward for the long term.

 

In order to have an action to maintain until you achieve your goal, you need to be able to sustain it. If your repayment goal is too aggressive, an emergency may arise and you won’t have the cash flow you need to both pay your student loans and deal with the emergency. If you make a misstep early on because your plan was too aggressive, you may lose motivation to work toward your goal entirely. That can leave you feeling unmotivated to sustain your repayment plan. You can always increase the intensity of your goal later if you find you’ve got a lot of room in your budget.

 

My Student Loan Motivation Journey

 

During College

 

While I was in college I wasn’t particularly motivated to worry about repaying my student loan debt. I worried enough that I worked two jobs, applied for scholarships, and borrowed only for tuition and fees but I didn’t worry enough to check my student loan balance regularly or think about the interest accumulating on my unsubsidized loans.

 

Immediately After Graduation

 

When I graduated college I became a pharmacy resident which meant instead of a six figure salary I was looking at a salary that was less than half of that. I was motivated to make payments and figure out a repayment strategy because at this point I realized I had accumulated $10,000 of interest on my unsubsidized student loans while I was in school.

 

Although I could enter forbearance and not make payments because I was in residency I didn’t want to do that because I would still accrue interest, and at an average interest rate of 6.5% for $128,000 that interest would accumulate fast. I had originally picked a 10 year standard repayment plan but discovered those payments were $1500 per month and I couldn’t afford to pay that much with my resident salary. I enrolled in the income-based repayment plan and paid about $380 each month and paid extra when I could afford to. That year I paid $6,000 on my student loans but that wasn’t enough to keep up with interest and my loan balance crept up to $132,000.

 

After Residency

 

When I was finally making full-time pharmacist salary I knew I had to tackle these loans quickly. The rate of interest accumulation was staggering, and I would dig myself into a deep hole quickly if I didn’t repay aggressively. So that’s what I did, I changed my repayment plan back to the 10 year standard plan and paid extra. My first year I paid over $28,000 toward my student loans, but then I had an unwelcome surprise.

 

I paid almost $14,000 in interest and couldn’t deduct any of it on my income taxes. I was really mad because the government was taking my money twice. I was being taxed on my earned income and then paying interest on my federal student loans. Then I discovered refinancing, halved my interest rate, and entered a 5 year repayment plan.

 

After Refinancing

 

After I refinanced my student loans I had an initial flood of motivation. My monthly payment was $1345 and my goal was to spend at least $3,000 a month on my student loans. However, I also realized I wanted to travel and I had the cash flow to do it if I just didn’t make an extra payment on my student loans that month.

 

So for a couple years I went on skipping extra payments and averaged paying about $2,000 a month toward my student loans. It’s not that this was terrible, but I wasn’t exactly meeting my goal.

 

Today I’m going to be out of student loan debt by September 2019, if I could be more aggressive it’d be awesome to be out before my 30th birthday (August 2019), but we’ll have to see about that. Because the end is so close for me I’m incredibly motivated again and I can almost taste the freedom from my student loan debt. I’ve been paying at least $3,000 per month on my student loans since January 2018 and I don’t let myself off the hook for making those payments.

 

Today, I owe just over $48,000 on my student loans. My motivation to get rid of that debt is here to stay until it’s gone.

 

What’s your student loan motivation journey? Have you had up’s and downs? What stage are you currently at? Let me know in the comments below or on the Repayable Facebook Page.

The 5 Stages of Tackling Student Loan Debt

The 5 Stages of Tackling Student Loan Debt

by | Jun 6, 2018 | Mindset, Think Pieces

Getting out of student loan debt is a long term goal. It’s no easy feat to wipe out tens of thousands of dollars in education-related debt. For most of us, becoming student loan debt free is an undertaking that takes years to accomplish. Today’s post is going to talk about the totally normal waxing and waning of motivation that happens when you decide to tackle your student loan debt.

 

Read this if you want a fresh perspective on why your motivation for repaying student loan debt cycles. Estimated read time ~5 minutes. 1.5 x watch time ~4 min.

To describe the changes in motivation that happen throughout student loan debt repayment I’m going to use the trans-theoretical model, better known as the stages of change. This model is commonly applied to behavioral changes such as beating addiction or making another health-related lifestyle change. The stages of change also apply to tackling your student loan debt.

 

Stage 1. Pre-contemplation

 

Borrowers in this stage are not thinking seriously about repaying their student loans and tend to defend their current lack of concern. Many don’t see student loan debt as a big deal. The benefits of borrowing money outweigh the adverse consequences so they are happy to continue borrowing.

 

This is the stage most actively enrolled college students are in. Students need money to pay for their education so they continue to borrow and spare themselves from worrying about the long term impact of repaying the loans until a future time.

 

Stage 2. Contemplation

 

Borrowers in this stage are able to consider the idea that they can do something about their student loan debt but feel ambivalent about taking the next step. On the one hand their student loans gave them the education they needed, and ignoring repayment may give them more money to spend each month. On the other hand, they are starting to experience some adverse consequences like wage garnishment, offset tax returns, and collection calls if in default or rapidly accumulating interest, failure to pay down principal, or not enough cash flow if in the wrong repayment plan.

 

This is the stage many recent graduates are in and this is often the stage many defaulted borrowers are in. The consequences of student loan debt are starting to surface and come to a borrowers attention.  

 

Stage 3. Preparation

 

Borrowers in this stage have usually made a recent attempt to figure out what to do about their student loan debt. Borrowers are less ambivalent about taking the next step because they see the cons of doing nothing are starting to outweigh the pros. They are usually taking some small steps towards changing their repayment approach. They believe that change is necessary and that the time for change is imminent. Equally, some people at this stage decide not to do anything about their current repayment strategy.

 

When borrowers reach out to me with an email, this is typically the stage of change they’re in. Borrowers in this stage have often done some reading online or perhaps unsuccessfully contacted their loan servicer to figure out what their best student loan repayment strategy is. This stage can happen at any time for a borrower.

 

Stage 4. Action

 

Borrowers in this stage are actively taking steps to change their repayment strategy and making big steps towards significant change. Ambivalence is still very likely at this stage. There is a great risk of “relapse” in this stage because borrowers are likely to encounter several difficulties and a lack of information.

 

Borrowers in this stage are calling their loan servicers, completing necessary applications, and actively making adjustments to their repayment strategy. This stage happens after borrowers have reached a decision about their student loan repayment strategy.

 

Stage 5. Maintenance

 

Borrowers in this stage have successfully changed their repayment strategy and are continuing to keep up with maintenance paperwork (such as annual income certification) and are making on time monthly payments. These borrowers have learned to anticipate expenses and have developed effective financial strategies to stay on track. Borrowers may lose sight of their goal temporarily, but don’t tend to see this as failure.

 

The Cycle of Motivation

 

During the long process of repaying student loan debt, some borrowers will experience default, or relapse. Relapses can teach important lessons and strengthen a borrower’s resolve to get out of debt for good. The drawback is that relapses can also trigger a borrower to give up on their quest for a #debtfreedream. The key to recovering from a relapse is to review the repayment process up to that point, identify strengths and weaknesses, and develop a plan to resolve those weaknesses to solve similar problems the next time they occur.

 

Relapse is a factor in the action or maintenance stages. When it comes to substance abuse and lifestyle change, research clearly shows that relapse is the rule rather than the exception. If you’re struggling and need a little help you can always DM @therepayable on Instagram or send me an email jeni@repayable.org

 

A lapse is different from a relapse. A lapse is a slip up with a quick return to your maintenance repayment strategy whereas a relapse is a full-blown default. For borrowers a lapse might mean you splurged financially somewhere and failed to keep your goal of making an extra student loan payment. But you’re still on track to pay off your student loans. For borrowers counting on PSLF a lapse would be failing to re-submit your annual income certification on time and letting your income driven repayment plan change back to a standard repayment plan. You’ll pay more money than you needed to before getting loan forgiveness but you’re not ineligible because of it.

 

I hope this article gave you some language to think about your student loan debt and any potential slip-ups you’ve made. I would love to know what stage you’re in, let me know in the comments below or on the Repayable Facebook Page.

 

Next week’s post will share a few strategies you can use to move yourself forward from one stage to the next and talk about my journey through the stages of change.

Exploring America’s Disdain for Student Loan Borrowers

Exploring America’s Disdain for Student Loan Borrowers

by | Apr 16, 2018 | #Millenniallife, Advocacy, Mindset

“Whatever happens around you, don’t take it personally… Nothing other people do is because of you. It is because of themselves.”
― Miguel Ruiz, The Four Agreements: A Practical Guide to Personal Freedom

You’ve probably noticed that if you bring up your student loan debt, people start to get visibly uncomfortable. If you start to get specific about your student loan debt some people will get nasty. Pretty soon you’ll hear things like “I bet you didn’t spend all that money on your education.” “My generation worked to pay for school, today’s kids don’t want to work.”

You know what these thoughts represent? The uncomfortable reality that college is more expensive now than ever.

The American Dream is built on the idea that any individual can have a picturesque life if they are willing to work for it. The American dream is built on meritocracy. My generation is invalidating meritocracy because of one unshakable reality, student loan debt.

The historic school of thought that you can “work to pay for college” doesn’t apply for many. Here’s the data driven statistic that stops that myth dead.

Today a student at a four year public institution has to work 51 hours per week at minimum wage to afford tuition and fees plus room and board. In 1980 a student had to work 22 hours per week at minimum wage to afford the same thing.

Sources 1,2,3

That’s an increase of 29 hours each week!

My assumption is that many of the folks saying their generation “had the work ethic to pay for school” have worked 40 hours a week for the duration of their careers. Yet if previous generations believe today’s students should “work to pay for school” then they’re mandating an additional 11 hours per week above the standard 40 hour work week and expecting students to put in those extra hours on top of a full-time schedule of classes.

Objectively, the student loan burden just doesn’t add up to an issue of work ethic, and that makes people uncomfortable. I mean shit, if America can’t blame the work ethic of a generation for suffocating student loan debt there might be a problem to deal with. If America accepts these statistics, we have to own the fact that we’re bankrupting future generations trying to obtain the American Dream through education.

Rather than face the problem head on, America pulls out more tools in the accusatory arsenal to shift blame.

“Well I’m sure you didn’t use all that money to pay for college.” becomes a handy weapon. Perhaps the spring break a borrower took at the age of 20 explains why they can’t buy a house at 30. If America can shame borrowers enough that will silence the problem.

But alas, the pesky facts won’t be silenced.

“The average annual price tag for tuition and fees plus room and board at a public four year institution is over $17,000 yet students annually borrowed an average of $7,000 to pay for that expense.”

Sources 4,5

That means students are finding ways to come up with over $10,000 a year for higher education. This statistic doesn’t line up with wasted money on spring break and lavish spending as the source of our problem.

So what is it then that gives America such disdain for borrowers? It surely isn’t reality and objective data. If Americans based their comments on data we’d be saying things like “Today’s graduates are expected to pay more for college while making less money.” or “Despite limiting spending to only tuition and books plus room and board, today’s graduates will need to come up with $76,000 to pay for a four year degree at a public university.”

Higher education is one way to secure the American dream. Federal funding, like student loans, makes access to college widespread and less dependent on a family’s earnings. But the cost is upsetting Americans, because student loans have become an unshakable burden for some graduates and are impeding the way to the American dream through education.

There’s something about the promise of a college graduate. All across America twenty-somethings full of hope, ambition, ideas, and skills are heading into the world to change it. It’s inspiring! One of them could change life as we know it! They could cure cancer, they could genetically engineer a bacteria to metabolize plastic and eliminate plastic pollution, graduates’ possibilities are endless and it’s so refreshing.

The promise of America’s future is so reassuring because that means the mistakes of the past don’t have to persist indefinitely. We can right our wrongs.

This is where student loan debt comes in and produces fear. Instead of seeing bright-eyed, ambitious, problem-solving graduates with the world at their fingertips, America sees twenty-somethings unable to afford rent and moving in with their parents. America sees ambition being trampled as borrowers make decisions based on their debt that don’t line up with the traditional American dream. How can the future be better when it’s innovators are preoccupied with basic financial needs?

Who wants to buy a house while struggling to pay off a mortgage worth of student loans?

Who can create a better future while paying for the past?

Enter the American consciousness, gnawing away at historical beliefs that the dream can be attained through education. The headlines tell America that young people are financially worse off than previous generations. But how can that be? The same system that’s crushing today’s borrowers empowered our parents.

So America presumes the problem lies with borrowers today. America presumes the student loan debt problem is brought about by wrongdoing of the generation feeling stuck. America presumes that the lack of ambition is the cause of the student loan debt problem rather than the symptom.

And so the attacks begin, to relentlessly protect America’s worldview and belief that the American dream can truly be obtained by anyone who works for it. If millions of borrowers think they’re going to disrupt the American dream with a whiny ass lack of work ethic, think again.

America will viciously defend the view that our country fosters the success of unlikely heroes rather than breeding underdogs in the first place.

I’m a borrower who took out $118,000 in federal student loans to obtain my Pharm.D. Because of interest, I ended up with $132,000 of student loan debt. I share this story all the time and oh, how I know the comments people make. Despite working two jobs and volunteering, earning competitive scholarships, and working now in service to the health of my fellow Americans, any mention of my debt paints me as an incompetent burden on society. My six-figure debt and I are a barnacle on America’s ship disfiguring the facade and resisting progress.

But here’s the thing. Every borrower I know is so much more than debt. We give our time and money back to our communities, we work in life-saving, innovative, future-building, commerce-generating, problem-solving professions that keep our country thriving. And the majority of us are relentlessly working to solve our own damn student loan debt problem however we can.

So what do I say to a fearful America uncomfortable with our $1.4 trillion in student loan debt?

“You can believe what you want about my generation. You can call us lazy, entitled, slacktivists, whatever derogatory terms you want.

 

But my generation isn’t stopping.

 

We will find a way out of this. We will build our way out, we will upset the order of higher education and replace it with a system that enables achievement of dreams through education.

 

We will do this with your help, but if you fail to help us we will find a way to do it without you.

 

Our generation isn’t the enemy of yours, we refuse to pit ourselves against you. Together we will build the future America and we have boundless potential to build it into a country that powers dreams for us all.”

 

References

1. NCES table 330.10 Tuition and Fees + Room and Board at four year public institutions 1979-1980 & 2015-2016 https://nces.ed.gov/programs/digest/d16/tables/dt16_330.10.asp?current=yes
2. Minimum wage information US Department of Labor https://www.dol.gov/whd/minwage/chart.htm
3. Bureau of Labor Statistics CPI Inflation Calculator https://www.bls.gov/data/inflation_calculator.htm
3. NCES table 330.10 Tuition & Fees + Room and Board at four year public institutions 2012-2013 https://nces.ed.gov/programs/digest/d13/tables/dt13_330.10.asp
4. https://nces.ed.gov/pubs2013/2013165.pdf U.S. Department of Education, National Center for Education Statistics, 2011–12 National Postsecondary Student Aid Study (NPSAS:12).

How I’m Tackling My Own Student Loan Debt

How I’m Tackling My Own Student Loan Debt

by | Apr 2, 2018 | #Millenniallife, Mindset, Money Matters

This post is for anyone wanting to see how I approach solving my own student loan debt. I’ll share my specific monthly payment goal and how I pay that amount each month. I’ll also share my first quarter progress. Estimated read time ~9 minutes.

 

My Student Loan Debt Goals

 

At the peak of my student loan debt right after I finished residency in 2014 I owed $132,000 in federal Direct Loans. After paying 6.8% interest on those loans for a couple years I discovered refinancing and it changed everything.

January 1st 2018 I owed $64,672.61 in student loans.

I knew the end was near and I could get out of debt before 2019 was over if I set an aggressive goal and stuck to it. So my student loan repayment goal for 2018 is to pay $3,000 per month on my student loans.

 

How I pay $3,000 a month on my student loans.

 

Let me make something explicitly clear. My education and student loan debt earned me a job that pays well. That means I can comfortably afford to repay my student loans aggressively.

 

There’s nothing magic about what I repay, and this post isn’t going to share  BS ideas about making money appear from nowhere to eliminate your debt. I’m privileged to be paid six figures a year and I’m privileged to be able to tackle my student loans aggressively without sacrificing actual needs.

 

This post shares my personal experience repaying my debt. Your experience may look totally different and that’s OK.

 

I spend my money intentionally.

 

When I first became a pharmacist I wanted to stop pinching pennies and living like a poor college student because I wasn’t anymore. I was making six figures and dammit I wanted a taste of that standard of living. I wanted to buy clothes that actually looked good not just ones that were on sale, I wanted to buy organic food and fuel my body because health is wealth, I wanted to adventure and see new things because life is short, and I wanted to buy myself, my family, my friends dinner out without being wracked with guilt. So I did.

When I was staring in the face of six long years of student loan repayment I couldn’t stand the thought of sacrificing these things when I could actually afford them now.

So, I half-assed my financial sacrifices.

To be fair I didn’t live like a queen but if I wanted something I got it. I was worn out from denying myself through six years of college plus a year of residency while working two part-time jobs. I earned good money and I wanted to spend it.

 

Now that the end was in sight though I wanted to speed up my repayment. So I made paying $3,000 toward student loans my first priority (bills and investments already accounted for) and my wants came later. It was hard to say no to myself at first. I would want to try some new makeup or pick up a few little things on a whim.

 

I started waiting until my next bi-monthly paycheck. To see if I still wanted this “stuff”. I discovered that most of the “stuff” I wanted was a fleeting interest and that when I really did want something I could buy it. This is the delayed-gratification mindset that got me through college in the first place.

 

I put all my surprise extra money toward student loans.

 

Specifically I’m talking about my tax return. Putting 100% of my tax return toward my student loans was a tough thing for me to do. Ever since I started working at age 14 and I’ve filed my taxes my tax refund has been my money to do whatever I want with.

 

I’ve always viewed tax returns as fun bonus money. I remember using my first tax return to buy an iPod Nano with a massive 1 G of storage space!

 

This year I put all $1,400 of my tax refund toward my student loans.

At first it was kind of depressing because I really wanted to revamp my professional wardrobe. But then I reminded myself that using this tax return to pay down my student loan debt gets me two weeks closer to freedom.

 

I save up for big spends.

 

I got used to my pharmacist cash flow and not really having to save for somewhat larger spending like a vacation. I would just not pay an extra $1500 on my student loans that month and boom vacation funded. But the problem was, I did that a few times a year and was slowing my repayment down.

 

My 3 month emergency fund is topped off and now anything over that amount is mine to spend. I’m saving that money for travel, a wardrobe revamp, or something else that comes up. Since January I’ve put just over $1,000 in there.

 

The mindset that helps me pay my loans aggressively AF.

 

This year is the first year the end of my student loans is in sight. I have 18 months left of repayment at this rate. I can truly believe and feel that these small sacrifices are only temporary. I don’t know about you but for me sacrificing my present standard of living to pay student loan debt is hard.

 

When I pay my student loan debt it feels like I’m investing in my past rather than my future.

 

I’m already reaping the benefits of a higher salary in work I enjoy because of my education. I already sacrificed to study and worked to pay for college years ago. Now it’s tough to keep paying for it after the fact.

 

I seem to find myself stuck in a counterfactual mind-game. Thinking Oh imagine if I had this $10,000 to invest and save and spend. But without the student loans I wouldn’t be making six figures. So it’s an endless cycle of wanting my cake and eating it too.

 

Now I can see how being rid of this debt makes my future self free. My future self is working 0.8 instead of full-time. She doesn’t have to do all her blogging on weekends and evenings and all the space between her full-time job. She still has money to invest and save and spend. That version of me is almost here. So for now I’ll say No thanks to piddly stuff and bring on my #debtfreedream!

 

How did I actually stack up on my $9,000 goal?

 

My goal was to pay $3,000 a month on my student loans so I should’ve paid $9,000 in the first quarter of 2018. Because of my tax return and a little extra contribution on my part

 

I paid $10,545 in the first quarter of 2018 and exceeded my goal.

 

I still have $54,702.65 left to go but that freedom is coming.

 

What are your student loan debt goals? I would love to hear them, we’re all in this repayment boat together so let’s inform, inspire, and encourage one another. Please share your goals in the comments below or on the Repayable Facebook Page so I can cheer you on!

 

Don’t keep your student loans around for the tax deduction.

Don’t keep your student loans around for the tax deduction.

by | Mar 5, 2018 | Mindset, Money Matters

Read this post if you want to see the exact impact student loan debt and it’s interest has. Estimated read time 3 min.

Student loans are not low-interest loans. Even federal student loans have interest rates ranging from 4.45% for Direct Subsidized loans to 7% for Graduate PLUS loans. That means interest starts adding up quickly. This makes the student loan interest tax deduction extra appealing. But is that tax deduction juicy enough that borrowers should keep their student loan debt around? In short, no way. Let’s see why that is.

 

The maximum value of the student loan interest deduction

 

Last week’s post discusses the in’s and out’s of the student loan interest tax deduction and is worth a quick read if you want to brush up on the subject.

The most money a borrower can get back from the tax deduction is $625 each year if they’ve paid and deducted a maximum of $2,500 in student loan interest and are in the highest eligible tax bracket.

 

A borrower example

 

Let’s look at a borrower with $37,000 (the average debt for a 2016 graduate) of student loan debt. These loans have an average interest rate of 5%. The tables below compare repaying under the 10 year standard repayment plan or aggressively repaying that debt in 5 years. The borrower makes $60,000 per year. Their repayment schedule looks like this.

 

10 year repayment term Interest Deduction Value
  $10,093 $2,523

 

5 year repayment term Interest Deduction Value
  $4,894 $1,224

 

The borrower who chooses the more aggressive repayment term will be out of debt five years sooner and they will also pay 52% or $5,200 less interest than the borrower who repaid over 10 years. That’s enough money to take a long international vacation! The borrower will get $1,299 less back in the form of a tax refund. But if you look at the five year period both were paying interest their tax deductions earned about the same amount.

 

The financial picture

 

The tax deduction is great when you’re already repaying your student loan debt. It’s a helping hand and can give back up to 25% of up to $2,500 in student loan interest. That being said, it’s not a good enough incentive to keep your student loan debt hanging around.

How much of a tax break do student loans really give you?

How much of a tax break do student loans really give you?

by | Feb 26, 2018 | Mindset, Money Matters

Read this if you’ve heard “student loans are good for your taxes” a time or two. Estimated read time ~3 minutes.

 

What is the student loan tax benefit everyone is talking about?

 

In short if you meet certain income requirements you can reduce your taxable income (and therefore your taxes) by subtracting the amount of interest you paid on your student loans.

 

How much interest can a borrower deduct?

 

Borrowers can deduct up to $2,500 from their taxable income if they fall below certain income limits.

 

What are the income limits for the student loan interest deduction?

 

This deduction starts to phase out once you make over $65,000 if you file as single and you can’t take the student loan interest deduction at all if you make more than $80,000 annually. If you make more than $165,000 as a couple filing jointly you can’t take this deduction at all but it starts to phase out at $135,000.

If you’re married filing separately you’re not eligible for the student loan interest deduction.

 

What is the most money I can save with the student loan interest tax deduction?

 

The most money a borrower can save by claiming the student loan interest tax deduction is $625.

Here’s how you can quickly estimate your savings: Student loan interest paid (max of 2,500) X % tax in your tax bracket

For this example that was $2,500 X 0.25 = $625

The tax deduction decreases once you’re over $65,000 as an individual or $135,000 as a couple but I’m not able to find a clear estimate of how that deduction phases out and changes. Essentially your maximum deduction happens when you make from $38,000- $65,000 per year (that means you fall into the 25% tax bracket) and you pay the maximum of $2,500 in interest.

 

How do I claim the student loan interest tax deduction?

 

Claiming the student loan interest tax deduction is pretty simple. You simple find your 1098-E form from your lender. Typically these forms are located in a “documents” type section of your online account or it gets emailed, or snail mailed to you. Then you plug your number into the indicated box on your tax form.