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If I transfer government student loans to a private loan business, can I still write off interest on taxes?

By admin | August 9, 2010

bluebird asked:


I currently have salliemae Federal student loans at 6.8%. I have an opportunity to take out a loan somewhere else for 2.7 % and pay off the higher interest rate loans. But will I still be able to write off the interest from this new loan as I do with my current student loans?

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    • Topics: student loans |

    No Responses to “If I transfer government student loans to a private loan business, can I still write off interest on taxes?”

    1. Mathew Says:
      August 10th, 2010 at 2:14 pm

      I do not believe you would be able to do that. However you still may be better off doing so.

    2. Bash Limpbutt's Oozing Cyst© Says:
      August 13th, 2010 at 3:36 pm

      Nope, as the loan won’t be a student loan any more but a personal loan.

      If you can get and keep that rate until the loans are paid off then that would be the way to go even with the loss of the student loan interest deduction. Even if you’re in the highest tax bracket and can deduct all of your student loan interest (unlikely on both counts) your 6.8% works out to 4.42% after tax at best. You’ve beat that soundly at 2.7% so go for it as long as it can’t increase to some higher rate in the future before it’s paid in full.