If you’ve applied for a private student loan to pay for college tuition, you might be 1098-E eligible. Basically, this allows you to deduct student loan interest payments when you file your annual tax return.
Once repayment on the loan begins, the bulk of monthly payments are applied toward the interest. Hence, it can take several years for the principle balance to decrease. This provision lets tax payers deduct their student loan interest payments, which can potentially lower their annual tax obligation. In many cases, this deduction can result in a return.
there are some lim itations to get the loan :
1.)Unfortunately, 1098- E eligible does not apply to all student loans. To qualify for this tax deduction, loan funds must be used for tuition or attendance, fees, supplies, books, and room and board. This student loan deduction does not apply on loans received by graduate students to help them prepare for examinations or interviews.
2.)1098-E eligible does not apply on loans to help with relocation costs. Dependents cannot claim the deduction on their tax returns. Moreover, a deduction cannot be claimed on loans in which you’re not obligated to pay back.
Each year, student loan interest statements are sent to all persons who paid $600 or more in interest payments.