Can we get Tax benefits for a student loan from Prodigy Finance? If yes, can we claim it during the study period(no loan repayments); or is it after the repayment starts?

[Texas Roger · Accepted solution]

Whoever claims the student on their tax return can claim qualified education expenses (tuition and fees, books, and course related equipment) paid out of pocket or with loans for a credit on their tax return. This would be the American Opportunity Credit for undergraduates in their first 4 academic years of study or Lifetime Learning Credit for others. The student will receive a 1098-T from their school with most of the information that needs to be entered on the tax return. If the student had scholarship income than paid for non qualified expenses such as room and board, that income must be entered on the student's tax return.

When you begin repaying the student loan, you will receive a 1098-E which shows the interest paid that can be entered as an adjustment to income on your tax return. Not sure about Prodigy Finance as the lender.