Tax Consequences Faced By Students

Dana Lime, over at NerdWallet, just published a study on the tax consequences faced by students as a result of the Senate's new bill on student loans. This study is worth sharing with all of you.

The Nerdwallet study found, according to Lime the following: 

• [First], while the Senate has approved lower rates on student loans at 3.86% for the next few years, on average students will lose 25% of their higher loan costs in taxes because the IRS currently limits student interest deductions to $2,500 a year. This limitation is even more egregious for future students borrowing at higher rates linked to the 10 yr treasury note.
  

NerdWallet's [Other] Key Findings:

• A student who borrows at 3.86% will lose $530 in lost tax benefits over 10 years because of IRS interest deduction limits
• A $500 increase in the limit could collectively save students up to $950 million over 10 years
• Current IRS rules hurt future students who will pay more interest than current students
• IRS income restrictions penalize higher income grads who are ineligible for the deduction
  
  
  
  
  Links: 
  
  
  • How Students Can Save on Taxes Under Senate's Proposed Student Loan Rates
  • Who is NerdWallet