Tax Consequences Faced By Students
Dana Lime, over at NerdWallet, just published a study on the tax consequences faced by students as a result of the Senate's new bill on student loans. This study is worth sharing with all of you.
The Nerdwallet study found, according to Lime the following:
The Nerdwallet study found, according to Lime the following:
- [First], while the Senate has approved lower rates on student loans at 3.86% for the next few years, on average students will lose 25% of their higher loan costs in taxes because the IRS currently limits student interest deductions to $2,500 a year. This limitation is even more egregious for future students borrowing at higher rates linked to the 10 yr treasury note.
NerdWallet's [Other] Key Findings:
- A student who borrows at 3.86% will lose $530 in lost tax benefits over 10 years because of IRS interest deduction limits
- A $500 increase in the limit could collectively save students up to $950