I consolidated my student loans this year & my 1098-E was for all interest paid off for the whole loan.... that isn't what I claim even though that's what my 1098-E says?

[MichaelMc]

Yes. When a student loan is refinanced or multiple loans are consolidated, all of the capitalized interest is considered paid by the proceeds from the new loan. Please enter the information from Form 1098-E exactly as it appears.

Please keep in mind, however, that your student loan interest deduction for the year is capped at $2,500.

For more information, please see IRS Pub. 970 Tax Benefits for Education, Chapter 4.

[kykingdom]

I have to say, this seems like an unfair claim of interest previously paid and claimed on previous years' taxes.  It also seems a bit odd that I had one lender report interest paid in this year only while the other was for the life of the loan until it was paid off through a refinance.  I figure this is because of different interest compounding methods or something related, but it just makes the one stand out as even more of a red flag when comparing them.

I do appreciate this information though.  I have always gone with the numbers reported on all tax forms as a default good measure.  That is what the IRS will receive and any differences could trigger an audit or rejected tax filing at the very least.