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I am an 0L who worked full-time this year and will begin LS in the fall. Can I take out student loans only for cost of living, not have any of it apply directly to tuition, pay tuition out of my pocket, and deduct the tuition from my taxes? Can I pay 2nd semester tuition this calendar year and deduct that as well?

Also, for the subsidized loans (8500/year I believe), what are the terms of repayment? Are there any fees?

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whuts4lunch wrote:I am an 0L who worked full-time this year and will begin LS in the fall. Can I take out student loans only for cost of living, not have any of it apply directly to tuition, pay tuition out of my pocket, and deduct the tuition from my taxes? Can I pay 2nd semester tuition this calendar year and deduct that as well?

Also, for the subsidized loans (8500/year I believe), what are the terms of repayment? Are there any fees?

Sure. You can take out as little or as much as you want for your loans but it will go to your school first so they will apply it to tuition. This won’t make any practical difference though. As for all the terms and stuff that is all one the entrance loan counseling you have to take for the federal loans so just actually read it rather than just going straight to the questions on the part you need more info on.

OP, you are making this much more complicated than necessary:

I.R.S. Publication 970 wrote: You can claim a tuition and fees deduction for qualified education expenses paid with the proceeds of a loan.

Also, since you seem to have a pretty limited understanding of both educational lending and federal income taxes, I should point out that you aren't going to get a dollar-for-dollar reduction of your income tax: deducting tuition allows you to reduce your taxable income by up to $4000. Many taxpayers may be better off claiming a Lifetime Learning/American Opportunity credit rather than the tuition deduction.

Thanks for the info.