Student Loan Deduction

[Sean28]

Hello,

I had an old student loan turned over into collections, roughly for $9,000. The CA advised me they worked with Sallie Mae and offered me a settlement of $3,800, which I accepted and paid in full. I was previously paying $110.00 per month and the CA said they were still charging me 30% interest on the balance of my loan. My question is, Can I claim what I paid plus the interest on my upcoming tax return. Does it matter that this was turned over to a CA. I haven't got a tax form from them, however I only settled about a month ago.

Any help is appreciated.

Thanks,

[Sean28]

bump

[Anonymous]

I believe you will only be able to claim the interest you paid on the loan, prescribed on the 1099-INT issued by the funding company. Any amount that you paid in settlemant is not interest, it is a legitimate debt that you owed. If they chose to forgive the debt for less than the full value, you may have to claim that amount as income of a forgiven debt.