All articles tagged with #educationfinance
Master's degree holders earn significantly more than those with only a bachelor's or high school diploma, but many face substantial debt. The top-paying master's degrees are in fields like computer science and engineering, with starting salaries over $100,000. However, fewer than 60% of master's programs offer a positive return on investment, highlighting the importance of choosing the right field.
Borrowers who resumed student loan payments in 2023 can potentially deduct up to $2,500 of paid interest on their federal tax return without itemizing. Eligibility for the deduction is subject to income limits, loan ownership, payment responsibility, and dependency status. For 2023, phase-outs begin at a modified adjusted gross income of $75,000 for single filers and $155,000 for joint filers. The deduction is available for interest on federal and private loans, origination fees, capitalized interest, and revolving lines of credit used for education expenses. However, interest paid by employers or from tax-free tuition plans cannot be deducted. While federal student loan forgiveness is not federally taxed, some states may tax this forgiveness.
The restart of federal student loan repayments has been marred by significant issues, including late bills, incorrect billing statements, and excessively long customer service wait times. The Education Department penalized its loan servicers for these failures, with Aidvantage, Nelnet, and EdFinancial facing financial penalties based on the number of affected borrowers. The Consumer Financial Protection Bureau highlighted a backlog in processing applications for the new income-driven payment plan, SAVE. Education Secretary Miguel Cardona assured that borrowers with late bills would not owe payments or incur interest during administrative forbearance, which counts towards loan forgiveness programs. Loan servicers and consumer advocates have expressed concerns over the rocky resumption process and the need for better solutions, including calls for student debt cancellation.