10. The deduction for student loan interest is phased out at higher levels of modified adjusted gross income, whereas the exclusion for student loan distributions from 529 plans has no phaseout.
11. Federal student loan rates are set each year by Congress and are tied to the yield of 10 – year Treasury notes. They are set each spring and effective for the upcoming academic year. Rates on private lo ans are affected by the federal rates. The current unusually low rates reduce the cost of borrowing significantly. College graduates who are unable to find a job during the pandemic may consider borrowing for graduate studies, especially given the low rates.
12.Tax advisers are in a position to help their clients plan for the future. All options, including splitting the cost of tuition between the student and the parents, and using IRAs and other savings vehicles, should be considered.
1 Stahl, «4 Industries That Are Still Hiring in the Midst of COVID – 19 ,» Forbes (), available at forbes.
3 Kuchar, «Companies Are Now Getting a Tax Break to Help Employees Pay Down Student Loans During Coronavirus,» Money (), available at money.
5 Ingraham, «7 Ways $1.6 Trillion in Student Loan Debt Affects the U.S. Economy,» The Washington Post (), available at washingtonpost.
7 Rothstein and Rouse, «Constrained After College: Student Loans and Early Career Occupational payday loans Oregon Choices,» 95 Journal of Public Economics 149 (2011).
8 Swaminathan, «Student Loan Borrowers Face ‘Increased Stress, Anxiety, and Depression’ Amid Coronavirus Shock, Survey Finds,» Yahoo Finance (), available at finance.yahoo.
11 Lake, «How States Are Helping Private Student Loan Borrowers During Coronavirus,» Fox Business (), available at foxbusiness. The states include California, Colorado, Connecticut, Illinois, Massachusetts, New Jersey, Vermont, Virginia, and Washington state, as well as Washington, D.C.
13 American Student Assistance Young Workers and Student Debt Survey Report Methodology (), available at file.asa.org. The survey polled 502 young workers between the ages of 22 and 33 and 451 human resources managers.
14 Examples of other companies offering a student loan repayment benefit are PwC, NVIDIA, LiveNation, Staples, First Republic, Aetna, Chegg, and Hulu. In addition, the U.S. Department of Justice, the U.S. Department of Agriculture, and other federal agencies offer student loan repayment programs to attract and retain qualified candidates for specific positions in government service.
16 Abbott Press Release, «Abbott Announces Freedom 2 Save Program for Employees to Address Student Debt» (), available at abbott.mediaroom.
17 Abbott Press Release, «Nearly 9 Out of 10 College Students With Student Debt Say It’s Important to Find a Company That Offers Loan Relief» (), available at abbott.mediaroom.
S. Department of Education offers a public service loan and a teacher loan forgiveness program, and many states offer state – sponsored teacher loan forgiveness programs as well
28 Sec. 108(f). A person whose debt is discharged may receive a Form 1099 – C from the lender, but failure to receive the form does not make the COD income nontaxable (Ngatuvai, T.C. Summ. 2004 – 143 ).
31 Rev. Proc. 2015 – 57 and Rev. Proc. 2017 – 24 . Examples include the Corinthian College and American Career Institute closures.
32 To have their federal student loans discharged, students must submit an application to the Education Department. See a complete list of closed schools at .
Contributions to a 529 plan can be made throughout college or after graduation, providing a good opportunity for relatives to help pay the student’s loans
40 11 U.S.C. 523(a)(8). Prior to 1976, student loan debt could be discharged in bankruptcy. Congress then changed the law. Student loans were dischargeable if they had been in repayment for a certain number of years. In 2005, Congress extended this protection to private student loans.