$2,500 Max Student Loan Interest Deduction?

Paying for College
1

<p>Perhaps I am confused here, but as I’m slowly filling out my FAFSA for 2009-2010, I see no place to list your CURRENT student debt. You can subtract up to $2,500 from your AGI of student loan interest – whoopie… I paid over $5,000 last year in student loan interest, and have capitalized interest of $10,000! I have about 75k in private student loans and 10k in federal/Stafford loans from my Undergrad (which is about $120k when I actually pay it off!). How do they figure this in??? I don’t think a $2,500 deduction fairly considers this!</p>

<p>Incase it helps, some quick facts about my situation:
2008 is my first year filing as an independent (graduated undergrad in May 07), I work for a non-profit (making ~32k/year pre-tax), trying to get a Master’s in Music Education w/ an Initial Licensure to teach in the public schools, undergrad is from a Music Conservatory w/ a BM in Music Performance. I live in the city (expensive rent), and put basically ALL my extra income towards my students loans (~$400-800/mo.)</p>

2

<p>No you are not confused. Debt is not taken into account by FAFSA. I don’t know what to suggest other than talking to your school. According to finaid, even student debt is not generally allowed as a special circumstances adjustment so I don’t know if they can do anything. Always worth asking.</p>

<p>Good luck.</p>