(LOANS-24-02) Loan Servicing Information - Reporting Student Loan Interest Payments for 2023

Author
Federal Student Aid
Electronic Announcement ID
LOANS-24-02
Subject
Loan Servicing Information - Reporting Student Loan Interest Payments for 2023

As tax time approaches, we want to share general information with the financial aid community about our reporting of student loan interest payments. For most of 2023, payments were paused and the interest rate was set to 0% for eligible federal student loans. While some borrowers were making payments during the payment pause, all borrowers began accruing interest on September 1, 2023, and payments resumed in October. If a borrower made federal student loan payments in 2023, the borrower may be eligible to deduct a portion of the interest paid on the borrower’s 2023 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 under specific circumstances.

Below we provide information about reporting student loan interest for 2023 through three 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 must report payments on IRS Form 1098-E by Jan. 31, 2024, 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 visit his or her servicer’s website for the exact amount of interest paid during the year and, if needed, to request a statement of interest paid.

How many 2023 1098-E’s should a borrower expect to receive?

Most borrowers who paid $600 or more in interest during 2023 will receive one 1098-E. Borrowers who had multiple servicers in 2023 may receive two or more 1098-E’s. If a borrower has questions about 2023 1098-E’s, direct the borrower to his or her current federal loan servicer’s website for assistance.

What are the different scenarios that may apply to 2023 1098-E dissemination?

The two scenarios outlined below cover the majority of federal student loan borrowers:

  1. Borrower’s Current Servicer Was Their Only Servicer in 2023: 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 2023 was $600 or more. The servicer may send the 1098-E to the borrower via U.S. mail or electronically.

  2. Borrower Had Multiple Servicers in 2023: 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 2023 was $600 or more. If the interest paid to each individual servicer is less than $600, but totals $600 or more across servicers, the borrower may request a statement of interest paid from those servicers. Each servicer may send the statement to the borrower via U.S. mail or electronically.

Contact Information

We appreciate the community’s support in directing borrowers to their current federal loan servicers for 2023 1098-E information.