Gage ily to go to college, get his degree from the University of California at San Diego, and eventually become a cardiologist.

But then he and his parents took a look at the financial aid award. He was given a grant for a little less than $3,000. And the school, which determines how much a student can take out in federal loans, will let him borrow just $6,800.

Now, not only does Gage face borrowing more than $27,000 over four years, but his parents will need to take out about $72,000 in higher interest loans.

Paying $18,000 out of pocket per year is more than his parents Stacy and Alfred Marquez can afford. On an income of less than $100,000, there’s not much left after paying the mortgage, two car payments, health care premiums, braces for their eighth-grader, and food for three boys.

The family also has high medical costs, since one of Gage’s brothers has a learning disability and the other has a heart condition — which inspired Gage’s interest in cardiology. His mother, Stacy, has stayed home to raise her boys.

The ily once had some savings put away for college. But they had to live off that money when Gage’s father, Alfred, lost his job during the recession. He’s back at work now, but earns less than he used to and he doesn’t get health care benefits.

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“We are very blessed and make a decent living, but when it comes to college we feel poor,” she said.

Financial aid award letters are typically sent out in late March or early April and most students have until ily probably wasn’t the only https://worldpaydayloans.com/payday-loans-ak/ one surprised to find out just how much they’d have to pay for college. Continue reading “There are a handful of loan options available for families”

When tax season is upon us, whether you’re a student or parent, if you have been paying interest on your student loans, you should take the time to understand the different tax credits and student loan tax deductions available. You may be eligible for savings that could put real money back in your pocket.

Understanding student loan tax deductions can be a bit confusing, if not overwhelming. Luckily there are several online resources to help you make sense of it all. Here are some basics to get you started, but if you have any questions, it’s always best to consult with a tax professional.

Tax Credit vs Deduction

When filing federal taxes, either online or with the help of a certified tax professional, the goal is to always pay your share but no more. This is where tax credits and deductions come into play for qualifying student loan expenses.

• Tax credits: Reduce the amount of taxes paid by the tax filer- meaning, a larger tax refund or a reduced tax payment amount.
• Tax deductions: Reduce the amount of taxable income-meaning it reduces the amount of the tax filer’s income that is taxed.

Here are some tax forms related to student loan tax credits and tax deductions that you may receive from your school or student loan lender.

• Form 1098-T: A form generally received by the student from their school by January 31. This form will identify qualified tuition and related expenses payments you have made. If you receive this form, keep it with your other tax forms until you are ready to file your taxes.
• Form 1098-E: If the tax filer has paid $600 or more in interest on a qualified student loan during the year, the filer will receive this form from the entity https://getbadcreditloan.com/payday-loans-ak/ (likely the lender or servicer) to which the student loan interest was paid. If you receive this form, keep it with your other tax forms until you are ready to file your taxes.

Higher Education Tax Credit

There are two tax credits which allow a taxpayer to claim tuition and fees paid for education-related expenses. Continue reading “Student Loans and Tax Credits: What You Need to Know”