I paid off a portion of my student loan in 2024, but the loans were for when I attended college in Wisconsin in 2014-19. Do 2024 loan payments count as Tuition Expenses?

[SchauerBrad]

I've paid off $80/month on my Nelnet student loan throughout 2024. I attended school in-state. Should I count that $960 total as "Tuition Expense" on my Wisconsin state return? I'm just confused if there is a difference between paying tuition directly or through a student loan (multiple years ago too). I doubt it matters, but just in case, I also already submitted my 1098-E on my Federal return. I'd appreciate any advice. Thank you.

[xmasbaby0]

No.    The loans paid for your tuition.  You can enter the 1098E for the deduction for the interest paid.   NO you do not go on the Wisconsin return and enter anything about  2014-2019 tuition for 2024.   The school got its money from your lender, and now you are paying the lender back.    You paid $960 to the lender.    Some of that $960 was principal, some of it was interest.  You were only supposed to enter interest paid on your federal return.

[SchauerBrad]

@xmasbaby0 I should mention I only entered the interest on my Federal return. Just wasn’t sure if there was any relation to tuition expenses on my state return.

If I’m reading the first portion of your reply correctly, I CANNOT enter my loan payments, but I CAN enter the amount of interest payed from my 1098-E on my state return as Tuition Expense?

[xmasbaby0]

Sorry---I am not familiar with the WI return.  I do not know if you can enter the interest for a student loan on the state form.   You do NOT enter anything whatsoever about this as a "tuition expense" for 2024.

[SchauerBrad]

@xmasbaby0 Ok, I appreciate your help. Thank you!

[Hal_Al · Accepted solution]

Q. Do 2024 loan payments count as Tuition Expenses?

A. No.

Q.  I'm just confused if there is a difference between paying tuition directly or through a student loan (multiple years ago too)?

A. Yes & no.  There is no difference in paying tuition directly or through  student loans, in the year you take the college courses. You (or you parents) get to claim the tuition credit, at that time, no matter where the money came from.*  But you cannot claim later loan payments as tuition payments. You (or you parents) should have claim those credits back in 2014-19 (and probably did). The college issued form 1098-T to assist in that process, just like bank issuing form 1098-E allows you to claim the loan interest this year.

As others have said, there is a current year student loan interest deduction. You deduct only the interest paid (not the total payment).  Technically, it's an adjustment to income. So, you get the adjustment (deduction) even if you don't itemize deductions. You get it in addition to your standard (or itemized) deduction.  The deduction is maxed at $2500 per year.  If you entered your 1098-E correctly, in TurboTax, you got this deduction. It shows up on line 21 of Schedule 1 and then to line 10 of form 1040 (with any other Schedule 1 adjustments).

*Special rules apply for scholarship money or employer assistance.