Posted Date:January 16, 2015
| Author: | Jana Hernandes, Service Director, Operations, Federal Student Aid |
Subject: Loan Servicing Information - Reporting Student Loan Interest Payments for 2014
As tax time approaches, we want to share general information with the financial aid community about our reporting of student loan interest payments. If a borrower made federal student loan payments in 2014, the borrower may be eligible to deduct a portion of the interest paid on the borrower's 2014 federal tax return. Student loan interest payments are reported to both the Internal Revenue Service (IRS) and the borrower on IRS Form 1098-E, Student Loan Interest Statement.
We provide information about reporting student loan interest for 2014 through three basic questions and answers.
Under what circumstances do federal loan servicers report interest payments on IRS Form 1098-E?
As required by the IRS, federal loan servicers report payments on IRS Form 1098-E if the interest received from the borrower in the tax year was $600 or more.
If a borrower paid less than $600 in interest to a federal loan servicer during the tax year, the borrower may contact his or her servicer for the exact amount of interest paid during the year.
How many 2014 1098-Es should a borrower expect to receive?
Most borrowers who paid $600 or more in interest during 2014 will receive one 1098-E. Some borrowers will receive two or more 1098-Es. If a borrower has questions about 2014 1098-Es, direct the borrower to his or her current federal loan servicer for assistance.
What are the different scenarios that may apply to 2014 1098 dissemination?
The two scenarios outlined below cover the vast majority of federal student loan borrowers.
1) | Borrower's Current Servicer Was Only Servicer in 2014 – In this case, a borrower's current federal loan servicer will provide the borrower with a copy of his or her 1098-E if the interest paid in 2014 was $600 or more. The servicer may send the borrower his or her 1098-E via U.S. mail or electronically. |
2) | Borrower Had Multiple Servicers in 2014 – In this case, each of a borrower's federal loan servicers will provide the borrower with a copy of his or her 1098-E if the interest paid to the individual servicer in 2014 was $600 or more. Each servicer may send the borrower his or her 1098-E via U.S. mail or electronically. |
Note: If a borrower receives no 1098-Es but believes that he or she paid a total amount of $600 or more in interest to all federal loan servicers combined, the borrower should contact each servicer for the exact amount of interest paid during the year.
Contact Information
We appreciate the community's support in directing borrowers to their current federal loan servicers for 2014 1098-E information. Each federal loan servicer highlights 1098-E information on the home page of its borrower Web site, and we encourage you to direct borrowers to look there for quick answers to their questions.
A borrower can access the NSLDS Student Access Web site to identify his or her current federal loan servicer.
A school that assists a borrower in identifying his or her current federal loan servicer can access the servicer information through the NSLDS Professional Access Web site. Contact information for the appropriate servicer also can be found on the Loan Servicing Centers for Schools Contact Information page on the IFAP Web site.