I took out a Smart Option student loan from Sallie Mae in 2011 to pay for graduate school. They paid my university directly and I graduated in 2012. I started making payments in January 2013 have paid over $5000 in interest in 2013.
When I log in to my Sallie Mae account to download my tax form, it says "Although you may have paid interest in 2013, it is ineligible for a tax deduction". When calling them they explain that it counts as a "private loan" and is not eligible for student loan interest tax deductions.
I don't get it. I took out the loan in my name, used it to pay for graduate school, Sallie Mae paid my university directly, and the name of the loan is 'smart option STUDENT LOAN'. Furthermore, I am pretty sure the university I graduated from is accredited since it is an Ivy League. Am I missing something here? I read the IRS guidelines on what counts as an eligible student loan interest deduction and the payments I made to Sallie Mae qualify, so I do not understand.
Should I just claim that on my tax return and explain it if I get audited?