Student Loan Interest Deduction

The Taxpayer Relief Act of 1997 provides an above-the-line maximum deduction for up to $2,500 of interest paid by taxpayers on qualified education loans. This provision is effective for interest due and paid on or after January 1, 1998.

Taxpayers may take a deduction on qualified education loans for the benefit of the taxpayer, the taxpayer's spouse, or any dependent of the taxpayer as of the time the indebtedness was incurred.

Originally, deductions were allowed only for the first 60 months that interest payments are required. The Economic Growth and Tax Relief Reconciliation Act of 2001 repealed the 60 month repayment limit for interest paid on or after January 1, 2002.

The deduction is phased out for taxpayers with modified AGI between $50,000 and $65,000 for single filers ($100,000 and $130,000 for joint filers). Married taxpayers must file jointly to take the deduction, and the credit may not be claimed on the return of anyone who is claimed as a dependent on another person's return.

For further information please check your tax return instruction booklet or the IRS website at www.irs.gov. The University of Missouri cannot calculate your deduction or make judgements on your ability to receive it. Please consult a tax advisor or qualified accountant to determine if you will benefit from this deduction.

What information will you receive from the University of Missouri-Columbia Student Loan Collections Office?

• Any borrower paying interest in the past calendar year will be sent a 1098E form by January 31. If loans are owed to the University of Missouri-Columbia and the University of Missouri-Rolla, all interest paid will be on one 1098E form. If loans are owed to the University of Missouri-Kansas City and the University of Missouri-St. Louis, please contact those campuses to see if you will receive a 1098E form. Forms are only required to be mailed if interest paid for the previous year was $600 or greater. The phone number for UMKC is 816-235-1346. The phone number for UMSL is 314-516-5526.

Additional information about the Taxpayer Relief Act of 1997 (including the HOPE and Lifetime Learning credits) may also be found at the University of Missouri-Columbia Cashiers Office webpage on TRA97.