Taxpayer has been going to college for several years and began paying on her student loans in 2015. She also entered into one of Obama's Student Loan Forgiveness Programs in 2015. She received two 1098-E statements totaling over $7000. She definitely did not pay that interest in 2015; however it appears that the new loan company under the forgiveness program paid the interest to the original loan holders. Normally, if she had not entered into a loan forgiveness program and refinanced her loans, that interest would be deductible being she technically paid the interest in the refi which she will pay off during the length of the loan. I would not think the interest is now deductible due to the forgiveness program. However, she said she is paying interest on her current loan so shouldn't some of the interest be deductible. Do any tax preparers have a cite reference that clearly states how to handle this situation?
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