The following links are designed to help students successfully manage their student loans.
| Education Tax Benefits | Deferment/Forbearance Options |
| Loan Consolidation Information | My Federal Loan History |
| Bar-Study Loan |
1. Education Tax Benefits
The Lifetime Learning Tax Credit can be claimed by students who pay qualified tuition and related expenses or persons paying qualified tuition and related expenses for an eligible student. A family may claim a tax credit of up to $2,000 per tax year for the taxpayer, taxpayer's spouse, or any eligible dependents for an unlimited number of tax years. Thomas Jefferson School of Law will furnish each eligible student with a 1098-T tax form for amounts billed as qualified tuition and related expenses during the preceding calendar year. The 1098-T forms will be mailed to the students by January 31, of the following year. The credit you are allowed may be limited by the amount of your income and amount of your tax. Please contact your financial advisor for more information regarding your eligibility. For more information on tax benefits available to law students, NASFAA (the National Association of Student Financial Aid Administrators) provides information regarding these tax benefits titled "Understanding the Lifetime Learning Tax Credit."
Tuition and Fees Deduction
Taxpayers can reduce income subject to tax by up to $4,000 for tuition and related expenses. Qualifying expenses are the tuition and fees required for enrollment at TJSL. These expenses must have been incurred by the taxpayer, the taxpayer's spouse, or the taxpayer's dependent. To claim this deduction, taxpayers must file federal tax form 1040; however, itemizing deductions is not a requirement. Visit the IRS Web site for additional information.
Student Loan Interest Deduction
If you took out student loans, you may be able to deduct up to $2,500 in interest paid yearly. To qualify, you should have used proceeds from the loan toward qualified higher education expenses, including tuition, fees, room, board, supplies, and other related expenses by you, your spouse, or dependent.
If you paid $600 or more in interest on a qualified student loan during the year, you will receive a Form 1098-E, Student Loan Interest Statement, from your lender or servicer. To claim this deduction, taxpayers must file federal tax form 1040 or 1040A; however, itemizing deductions is not a requirement.
2. Loan Consolidation Information
What is loan consolidation?
Loan consolidation allows you to combine any or all eligible outstanding federal student loans and create a single new loan with one monthly payment. The new loan will have a low fixed interest rate, new terms, and may have an extended repayment period of up to 30 years.
Which loans can be consolidated?
Not all loans may be eligible for consolidation. Private loans and bar-study loans also not eligible for a Federal loan consolidation. Loans from the following programs are eligible for consolidation:
- Subsidized and Unsubsidized Federal Stafford loans
- Federal Perkins Loan
- Graduate PLUS Loans
- Federal PLUS Parent Loans (Note: Students may not consolidate loans borrowed by their parents.)
What should I consider before making a decision about whether to consolidate?
Besides interest rate, it's important to consider the deferment options and repayment incentives currently available to you and compare those to what will be available under a consolidation loan. There are other factors to consider as well. Check with your lender(s) to find out how consolidating your loans may affect you. You can obtain your federal loan history and lender contact information at www.nslds.ed.gov. Here are some questions to ask your lender:
Pros and Cons
Before you consolidate, carefully review your options and weigh the pros and cons to be sure consolidation is the right choice for you.
Pros
- You can make it easier to keep track of who to contact about your loans. There will be only one payment if you combine multiple loans, lenders and loan payments into a single consolidation loan from one lender.
- There are no fees, no credit checks, and no prepayment penalties on a consolidation loan.
- You may consolidate your loans during your grace period before student loan payments are required.
- You choose which Federal loans you want to consolidate.
- Your variable interest rate loans (prior to July 1, 2006) will be consolidated into a loan with a fixed interest rate.
- If you consolidate while rates are low, you lock in a low interest rate and save money if interest rates increase later, as expected.
- Some lenders offer money-saving interest rate reductions and other benefits on consolidation loans.
- If the government pays the interest on some of your Federal Stafford loans now, you will keep this benefit after you consolidate.
- You may reduce your payment amount by extending the repayment term.
- You have a choice of four repayment plans - standard (level), graduated, income sensitive, and extended repayment - to help make payments manageable.
- If you defaulted on a student loan, you may still be able to consolidate and get a more manageable payment.
Cons
- Some lenders require a minimum loan amount before you can consolidate, or they may have other requirements.
- Your interest costs may increase if the loan you consolidate is repaid over a longer term.
- You may end up with a higher interest rate on the consolidation loan than the rate on some of the loans you consolidate because the interest rate is calculated on a weighted average and then rounded up.
- If interest rates fall in the future, you'll be locked into the current rate.
- You may not include private loans with your federal loan consolidation.
- You will lose the current borrower benefits.
- You will lose Perkins subsidy and cancellation benefits.
More Information
For more information, visit Direct Consolidation Loans.
3. Bar-Study Loan
The bar study loan is available to students to cover bar study course(s) and living cost expenses after graduation. Like the alternative loan, the bar study loan is also a consumer loan and therefore require borrowers to demonstrate good credit history as part of the eligibility requirement. Applications may be requested up to one year prior to graduation or no later than six months after graduation. Loan amounts typically range from $12,000 - $20,000 and school certification is required.
To apply online for a bar-study loan and view specific borrower benefits, go to your desired lenders website.
4. Deferment/Forbearance Options
Student Loan Deferment - A deferment means there are no payments required on your student loan during an approved period. For subsidized Stafford Loans, there is no interest that accrues during a deferment period. Students who qualify for a student loan deferment will have the government pay the interest on subsidized Stafford loans during the deferment period. To download any of the deferment forms, click here. For Federal Stafford/Direct Loans made after July 1, 1993, there are four types of deferments:
- In-School Deferment - As long as the student borrower is enrolled at least half-time no interest accrues and no payments are required until after a six-month grace period after the student ceases to be enrolled at least half-time. An in-school deferment form completed by your school's registrar staff may be required to verify your enrollment. Thomas Jefferson School of Law is a participant in the National Clearinghouse where enrollment data is electronically transmitted to this agency who then notifies lenders, loan servicers, and guaranty agencies. To download the In-School Deferment Request form.
- Unemployed Deferment - Student borrowers may be eligible for an unemployment deferment for up to three years after leaving school. A special deferment form will be required each year. To download an Unemployment Deferment form.
- Economic Hardship Deferment - If the student borrower is not eligible for one of the above two deferments, he or she may be eligible for this deferment. A borrower can not have earnings beyond the low standard of living as determined by the Bureau of Labor Statistics (BLS). To download the Economic Hardship Deferment form.
- Military Deferment - A borrower may defer repayment on eligible loans for up to three years while he or she is serving on active duty during a war or other military operation or national emergency, or performing qualifying National Guard duty during a war or other military operation or national emergency. The new military deferment created by the HERA is available only for FFEL, Direct Loan, and Perkins Loan program loans that were first disbursed on or after July 1, 2001. Click here to download the Military Deferment Request form.
Student Loan Forbearance - A forbearance is another excellent way to manage your student loan. A forbearance permits a student borrower a temporary period of time in which he or she may not make any payments on his or her loan, pay interest only, or make a payment for less than the normal repayment amount. A forbearance must be requested from your lender or loan servicer and a forbearance form must normally be completed. Click here to complete the forbearance form.
While it is not guaranteed, most lenders will try to accommodate your request so you don't go into default or have a delinquent loan repayment. The only bad thing about a forbearance is that, unlike a deferment where the government pays the interest for you, interest continues to accumulate. So if you can't make interest payments, you will end up paying "interest-on-interest."
With the deferment and forbearance options listed above along with the more flexible loan repayment options, there is no reason why a student borrower should fall into delinquency or default on his or her student loan. Student borrowers are strongly encouraged to maintain an organized file of all student loan records and documents and to regularly stay in contact with his or her lender or loan servicer to protect their credit rating. Contact your lender or loan servicer for the correct deferment or forbearance forms. Check with your lender or loan servicer on a regular basis to determine your loan status so that you are not placed in a delinquent or default status, which will seriously impact your future credit rating.
5. My Federal Loan History
The National Student Loan Data System (NSLDS) is the U.S. Department of Education's (ED's) central database for student aid. NSLDS receives data from schools, guaranty agencies, the Direct Loan program, the Pell Grant program, and other Department of ED programs. NSLDS Student Access provides a centralized, integrated view of Title IV loans. This site is especially useful to find out who holds your federal student loans when you enter into loan repayment or apply for a federal loan consolidation. To gain access to this secure website, go to www.nslds.ed.gov.