SAVE is an income-driven repayment (IDR) plan, which means that it calculates your monthly payments based on your income, rather than how much you owe. Starting in July, borrowers with undergraduate loans only will see their monthly SAVE payments cut in half, from 10% down to 5% of their discretionary income.
On July 1, 2023, following a negotiated rulemaking process, new PSLF regulations took effect. Highlights include new payment credits on consolidated loans, an improved definition of “full-time”, credit for certain deferments and forbearances, and a “buyback” provision.
Most borrowers couldn't claim the deduction on federal student loans during the pandemic-era pause on student loan bills, which spanned from March 2020 to October 2023. With interest rates on those debts temporarily set to zero, there was no interest accruing for borrowers to claim.
“With the approval of another $4.28 billion in loan forgiveness for nearly 55,000 public servants, the Administration has secured nearly $180 billion in life-changing student debt relief for nearly five million borrowers.
Your student loan servicer(s) will notify you directly after your forgiveness is processed. Make sure to keep your contact information up to date on StudentAid.gov and with your servicer(s). If you haven't yet qualified for forgiveness, you'll be able to see your exact payment counts in the future.
Now that the COVID-19 payment pause has ended, student loan payments have restarted. For most borrowers, the first payment after the payment pause ended was due in October 2023. Review important concepts, tips, and recommendations for repaying your student loans at Repaying Student Loans 101.
You may deduct the lesser of $2,500 or the amount of interest you actually paid during the year. The deduction is gradually reduced and eventually eliminated by phaseout when your modified adjusted gross income (MAGI) amount reaches the annual limit for your filing status.
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The American opportunity tax credit (AOTC) is a credit for qualified education expenses paid for an eligible student for the first four years of higher education. You can get a maximum annual credit of $2,500 per eligible student.
Taxpayers who are 65 and Older or are Blind
$1,950 for Single or Head of Household (increase of $100) $1,550 for married taxpayers or Qualifying Surviving Spouse (increase of $50)
You may notice your former servicer has cleared your loan account. For example, your loan balance may come up as “paid in full” on your former servicer's website or on your credit report. This does not mean you've received loan forgiveness. This is part of the loan transfer process.
You may be eligible for income-driven repayment (IDR) loan forgiveness if you've have been in repayment for 20 or 25 years. An IDR plan bases your monthly payment on your income and family size.
Can I get a refund if I already received forgiveness or paid off my loan? No. If you have already received forgiveness or paid off your loans, you are not eligible for a refund of prior payments.
Early Forgiveness and Other Benefits in 2024. Payments on undergraduate loans will be cut in half (reduced from 10% to 5% of income above 225% of the poverty line).
SAVE benefits available by July 2024 (on hold due to lawsuits) Monthly bills halved. Payments on undergraduate loans will be cut in half, from 10% to 5% of income above 225% of the poverty line.
How payments will be reduced. Under the SAVE plan, monthly payments are calculated based on a borrower's income and family size, regardless of how much student debt they have. Starting in July, monthly payments on loans borrowed for undergraduate school will be reduced from 10% to 5% of discretionary income.
To claim the American opportunity credit complete Form 8863 and submit it with your Form 1040 or 1040-SR. Enter the nonrefundable part of the credit on Schedule 3 (Form 1040 or 1040-SR), line 3. Enter the refundable part of the credit on Form 1040 or 1040-SR, line 29.
For 2023, the initial amount of the CTC is $2,000 for each qualifying child. The credit amount begins to phase out where modified AGI income exceeds $200,000 ($400,000 in the case of a joint return).
Usually only the state and federal governments are able to take your tax refund, therefore you'll probably get your refund if your student loan debt isn't: With the state or federal government. Part of a federally insured student loan program.
You, your dependent or a third party pays qualified education expenses for higher education. An eligible student must be enrolled at an eligible educational institution. The eligible student is yourself, your spouse or a dependent you list on your tax return.
Pell Grants and other Title IV need-based education grants are considered scholarships for tax purposes. So, Pell Grants and other educational grants are tax-free to the extent you use them for: Qualified tuition. Fees, books, supplies, and equipment required for your course of instruction.
If your student loan dropped to zero, it could be because your loan was transferred to a new servicer, or you qualified for student loan forgiveness.
If you work full time for a government or nonprofit organization, you may qualify for forgiveness of the entire remaining balance of your Direct Loans after you've made 120 qualifying payments—i.e., at least 10 years of payments. To benefit from PSLF, you need to repay your federal student loans under an IDR plan.