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May 12, 2020
Question

My refund is applied to my student loans. I typically recieve a paper for tax purposes saying that I'm paying on them. I didn't receive one this year, what should I do?

  • May 12, 2020
  • 1 reply
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1 reply

Carl11_2
Employee
May 13, 2020

If your tax refund was garnished to pay your student loan debt, then most likely you can't take a deduction for it at all. Particularly if you did not receive a 1098-E.

If you were in default on your debt, that means it was placed in collections and the collecting entity filed for an offset on your tax refund to pay that pat-due unpaid debt. Generally, once your qualified student loan is placed in collections, it's no longer a "qualified" student loan and the interest on it is no longer a deductible education expense.