My wife had 8 years worth of student loans spread across SallieMae and ACS. She hadn't paid a dime of payments to any of them yet -- they were all in In-School or Economic Deferment. Before July 2006, we consolidated all of them. That put the loan in repayment, and we paid interest only for 4 months of
2006, at $200 each, equals $800. Got a 1098 for $800. No problem here. But then I get a 1098-E for the amount of nearly $1,800. No idea where this came from. Certainly didn't come out of our pockets. The only thing I can think is that she had accrued $1,800 of interest with ACS. We then paid off the principle and that $1,800 interest with the SallieMae consolidated loan. So ACS considers that we paid $1,800 in interest for 2006. But we didn't really pay it. It just got capitalized into the new SallieMae loan. So can we take the $1,800 as a deduction for 2006?
Thanks,
Chris
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