BALTIMORE — Some student loan borrowers who claimed interest on their taxes may need to double-check their filings after incorrect information was sent out.
Edfinancial Services emailed some borrowers the wrong student loan interest amounts. The U.S. Department of Education says a loan servicer sent 2024 figures instead of 2025. A correction was issued in March.
Taxpayers who filed using the incorrect email figures could owe the IRS or miss out on a larger refund. The Department of Education confirmed that the official 1098-E forms were correct, and anyone who used the form does not need to take action.
WMAR-2 News reporter and student loan borrower Cyera Williams received an email on January 15 stating her reportable interest paid was $589.92. On March 6, after she had already filed her taxes, she received a correction email showing a difference of hundreds of dollars.
"So I was like, uh oh, let me see what I have to do, how much it is at first, but then what do I have to do to make sure that they're reporting the correct amount," Williams said.
Williams used the number from her official 1098-E form rather than the email, so her return was accurate. However, others online reported they were not as fortunate. Edfinancial Services did not respond to a request for comment.
Borrowers who used the wrong number may need to fix their returns. John Hardt is the director of the Low Income Taxpayer Clinic for the Maryland Volunteer Lawyers Service.
"The process for fixing it, in most cases I believe, will be to file an amended return," Hardt said. "You can claim up to $2,500 worth of payments against your income on your student loan debt as an expense on your tax return, and that would lower your adjusted gross income, the income that you're actually taxed on."
Hardt warned that taxpayers should be proactive about correcting any errors.
"Best case scenario is that you get a notice from the IRS in a couple of months saying that they've made corrections to your return based on information provided to them by your loan service provider," Hardt said. "If they miss it, then as I said, they can come back 3 or 4 years down the line after all this interest and penalties have been applied to it and suddenly become quite a significant amount of money potentially."
The tax filing deadline is April 15. Penalties and interest can start accruing the day after for those who owe and have not filed or paid. Taxpayers owed a refund have three years to claim it.
Those who need to amend a federal return will also need to update their state return. Depending on the tax software used, there may be a fee.
Borrowers facing a tax bill they cannot pay or who need legal assistance with a tax issue, can connect with the Maryland Volunteer Lawyers Service for help.
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