Student Loan Deferrals and Tax Credits

As a result of legislation passed in Congress and signed by the President in 2006, Taft University students are now eligible to defer repayment of existing federally insured student loans during their enrollment period with Taft. No unaccredited college or university can provide this benefit to its students.

Applicants are encouraged to check with their lenders to confirm deferral eligibility in their particular circumstances before enrollment.

The University filed an application with the Department of Education on the effective date of the new law and was approved in 2006. The law requires that an institution be accredited by an accrediting body recognized by the Department of Education such as DETC and meet certain other requirements before it can be approved. The approval also means that you may qualify for a Lifetime Learning Credit on your 2010 federal income tax return equal to 20% of your qualified education expenses. If you paid $5,500 in tuition, this could reduce your tax liability (or increase your tax refund) by as much as $1,100 per year for each year of your enrollment. For most taxpayers, they can claim the full credit if their adjusted gross income on a joint return is less than $87,000 ($43,000 if you file a single return).

(The normal disclaimer: we recommend that you consult with your tax advisor or read IRS Publication 970 to determine how this credit or deduction might benefit you.)

There is no charge for the completion of loan deferral forms or the preparation of the IRS Form 1098-T which is necessary to claim the tax credits or deductions.

We hope that the above information will be helpful in budgeting for your education.