Part of our commitment to keeping you informed is calling your attention to changes in the industry. In case you missed it, FSA shared general information with the financial aid community about their reporting of student loan interest payments. Because we know many of you assist your borrowers with their questions about student loan interest, we wanted to make sure you were aware of this announcement.
In the Loan Servicing Information - Reporting Student Loan Interest Payments for 2017 announcement, FSA provided guidance on three basic questions and answers.
Under what circumstances do federal loan servicers report interest payments on IRS Form 1098-E? As required by the IRS, federal loan servicers must report
payments on IRS Form 1098-E by January 31, 2018 if the interest received from the borrower in the tax year was $600 or more.
If a borrower paid less than $600 in interest to a federal loan servicer during the tax year, they may contact their servicer for the exact amount of interest paid during the year and to request a 1098-E.
- How many 2017 1098-E's should a borrower expect to receive? Most borrowers who paid $600 or more in interest during 2017 will receive one 1098-E. Borrowers who had multiple servicers in 2017 may receive two or more 1098-E's. If a borrower has questions about 2017 1098-E's, direct them to their current federal loan servicer for assistance.
What are the different scenarios that may apply to 2017 1098-E dissemination? These two scenarios cover the vast majority of federal student loan borrowers.
- Borrower's Current Servicer Was Only Servicer in 2017: In this case, a borrower's current federal loan servicer will provide the borrower with a copy of their 1098-E if the interest paid in 2017 was $600 or more. The servicer may send the 1098-E to the borrower via U.S. mail or electronically.
- Borrower Had Multiple Servicers in 2017: In this case, each of a borrower's federal loan servicers will provide the borrower with a copy of their 1098-E if the interest paid to the individual servicer in 2017 was $600 or more. If the interest paid to each individual servicer is less than $600, but totals $600 or more across servicers, the borrower may request a 1098-E from those servicers. Each servicer may send the 1098-E to the borrower via U.S. mail or electronically.
We hope that this is helpful and appreciate all you do to assist your borrowers.