What are the tax benefits of student loan repayment?

In Virginia, student loan borrowers may be eligible for tax benefits related to the repayment of their student loan debt. The federal government offers the Student Loan Interest Deduction, which allows borrowers to deduct up to $2,500 of the interest paid on their federal and private student loans each tax year. This deduction can be used to reduce the amount of income subject to federal taxes. Additionally, Virginia has a student loan tax credit called the Repayment of Education Loans Tax Credit. This credit offers eligible borrowers a tax credit worth 10 percent of their student loan repayment costs during the tax year. The credit is available to individuals earning no more than $75,000 in income and who are repaying a qualified loan. Finally, Virginia also offers a student loan repayment program for eligible individuals. The program is designed to help reduce the burden of student loan debt by providing tax-free employer contributions up to $4,000 per year that can be applied toward an employee’s student loan debt. Employers participating in the program receive a potential tax credit for their contributions. By taking advantage of these available options, borrowers in Virginia can potentially reduce their tax burden and ease the burden of their student loan debt.

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What are the tax benefits of student loan repayment?

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