How Refinancing Student Loans Affects Your Taxes

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How Student Loans Affect Your Taxes
Does Refinancing Affect Taxes?
Why Refinancing Student Loans Likely Won’t Affect Your Taxes
Deduction income limits. Income restrictions might make you ineligible for the deduction anyway, making this particular tax implication moot.Only taxpayers with a certain modified adjusted gross income (MAGI) can claim the deduction. For 2022, taxpayers with a MAGI between $70,000 and $85,000 ($145,000 and $175,000 for those filing jointly), the deduction is “phased out,” which means it’s gradually reduced. Those with a MAGI of $85,000 or higher ($175,000 or higher for joint filers) are ineligible. Greater overall savings through refinancing. Even if you qualify for the student loan interest deduction on your tax return, the lifetime savings you might receive through refinancing might outweigh any effects when it comes to a lower deduction claim.
Refinancing Your Student Loans
1. Finding a Lender
2. Choosing Loan Rate and Terms
3. Completing Your Application
4. Signing Final Documents
5. Waiting for Loan Payoff
The Takeaway
Frequently Asked Questions
Photo credit: iStock/Vladimir Vladimirov
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About the Author
Jennifer Calonia is a Los Angeles-based finance writer who has covered the gamut, including student loans, credit card rewards, consumer loans, and debt. Her work has been featured in outlets like Bankrate, NerdWallet, Business Insider, Yahoo Finance, and U.S. News.
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