Author Topic: Refinancing student loans interest deduction?  (Read 1434 times)

csnerd

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Refinancing student loans interest deduction?
« on: May 08, 2016, 03:07:07 PM »
Hey, i have 14.5k total in student loans left at 4.2%, 3.8%, and 3.4% interest. My plan is to pay these off as slow as possible since after deducting interest from taxes (25% marginal bracket) I would almost certainly get more from investments over a 10 yr period. If you were to refinance your student loans to a lower rate, is the interest still deductible from taxes or is it only from federal loans? Also, would i realistically be able to get a lower rate if i refinance all of these loans into one? The geometric mean of the interest rates is 3.65% and after deducting right now the geometric mean would be 2.73% so is it possible to refinance to lower than this?

Thanks!

MDM

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Re: Refinancing student loans interest deduction?
« Reply #1 on: May 08, 2016, 03:39:26 PM »
If you were to refinance your student loans to a lower rate, is the interest still deductible from taxes...?
Yes.  See https://www.irs.gov/publications/p970/ch04.html#en_US_2015_publink1000178256.

Don't know what refi rate you can get - you'll have to check because everyone's situation can be different.

Sibley

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Re: Refinancing student loans interest deduction?
« Reply #2 on: May 08, 2016, 05:04:38 PM »
As long as you refi to a qualifying loan, yes. Meaning, don't use your credit card. :)