Student Loan Interest Statement

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Instructions for Forms 1098-E and 1098-T (2010) 12:15 - 29-DEC-2009

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

2010

Department of the Treasury
Internal Revenue Service

Instructions for Forms
1098-E and 1098-T
Section references are to the Internal Revenue Code unless
otherwise noted.

What’s New
Truncating borrower/student identification number on
paper payee statements. Notice 2009-93 allows filers of this
form to truncate a borrower’s/student’s identification number
(SSN, ITIN, or ATIN) on paper payee statements for tax years
2009 and 2010. See part M in the 2010 General Instructions for
Certain Information Returns.

Electronic reporting. For Forms 1098-E and 1098-T, you
must file electronically if you are required to file 250 or more
returns. See part F in the 2010 General Instructions for Certain
Information Returns for more information.
Penalties. For Forms 1098-E and 1098-T, penalties may be
imposed for failure to file or failure to furnish correct forms.
However, under certain circumstances, the penalties may be
waived. See part O in the 2010 General Instructions for Certain
Information Returns for more information.

Specific Instructions for Form 1098-E

Reminder
General instructions. In addition to these specific
instructions, you should also use the 2010 General Instructions
for Certain Information Returns (Forms 1098, 1099, 3921, 3922,
5498, and W-2G). Those general instructions include
information about the following topics.
• Electronic reporting requirements.
• Penalties.
• Who must file (nominee/middleman).
• When and where to file.
• Taxpayer identification numbers.
• Statements to recipients.
• Corrected and void returns.
• Other general topics.
You can get the general instructions from the IRS website at
www.irs.gov or by calling 1-800-TAX-FORM (1-800-829-3676).
Form W-9S. You may use Form W-9S, Request for Student’s
or Borrower’s Taxpayer Identification Number and Certification,
to obtain the student’s or borrower’s name, address, taxpayer
identification number, and student loan certification to be used
when filing Form 1098-E or 1098-T. Use of Form W-9S is
optional; you may collect the information using your own forms,
such as financial aid applications, and procedures. You may
collect the student’s or borrower’s information on paper or
electronically.
Electronic submission of Form W-9S. An educational
institution, insurer, or lender may establish a system for
students and borrowers to submit Form W-9S electronically,
including by fax. Generally, the electronic system must:
1. Ensure the information received is the information sent
and document all occasions of user access that result in the
submission,
2. Make reasonably certain the person accessing the
system and submitting the form is the person identified on
Form W-9S,
3. Provide you with the same information as the paper
Form W-9S, and
4. Be able to supply a hard copy of the electronic
Form W-9S if the Internal Revenue Service requests it.
Also, if an electronic Form W-9S is used to obtain the
borrower’s certification that all the loan proceeds are used
solely to pay qualified higher education expenses, your
electronic system must require, as the final entry in the
submission, an electronic signature by the borrower whose
name is on Form W-9S. The signature authenticates and
verifies the submission. See Announcement 98-27, which is on
page 30 of Internal Revenue Bulletin 1998-15 at www.irs.gov/
pub/irs-irbs/irb98-15.pdf.

File Form 1098-E, Student Loan Interest Statement, if you
receive student loan interest of $600 or more from an individual
during the year in the course of your trade or business.
The $600 threshold applies to each borrower regardless of
the number of student loans obtained by that borrower.
However, you may file a separate Form 1098-E for each
student loan of the borrower, or you may file one Form 1098-E
for the interest from all student loans of the borrower.
Who must file. File Form 1098-E if you are a financial
institution, governmental unit (or any of its subsidiary agencies),
educational institution, or any other person who receives
student loan interest of $600 or more from an individual during
the year in the course of your trade or business.
If more than one person has a connection with the loan, only
the first person to receive the interest payment must file Form
1098-E. For example, a loan service or collection agent
receiving payments on behalf of the lender must file.
Qualified student loan. To be reportable for 2010, a student
loan must be either:
• Subsidized, guaranteed, financed, or otherwise treated as a
student loan under a program of the Federal, state, or local
government, or of a postsecondary educational institution, or
• Certified by the borrower as a student loan incurred solely to
pay qualified higher education expenses. You may use Form
W-9S to obtain the certification.
Revolving accounts. Report interest paid on revolving
accounts, such as credit card accounts, only if the borrower
certifies that all the loan proceeds are solely used to pay
qualified higher education expenses. You do not have to verify
the borrower’s actual use of the funds. Do not report interest on
mixed use loans.
Loans under qualified plans. Do not report interest on loans
made under a qualified employer plan, as defined in section
72(p)(4), or under a contract purchased under a qualified
employer plan within the meaning of section 72(p)(5).
Additional information. For more information about reporting
student loan interest, see Regulations section 1.6050S-3.
Statements to borrowers. If you are required to file Form
1098-E, you must provide a statement or acceptable substitute,
on paper or electronically, to the borrower. For more information
about the requirements to furnish a statement to the borrower,
see part M in the 2010 General Instructions for Certain
Information Returns.
Recipient’s/lender’s name, address, and telephone number
box. Enter the name, address, and telephone number of the
filer of Form 1098-E. Use this same name and address on Form
1096, Annual Summary and Transmittal of U.S. Information
Returns.

Cat. No. 27990J

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Instructions for Forms 1098-E and 1098-T (2010)

12:15 - 29-DEC-2009

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Account number. The account number is required if you have
multiple accounts for a recipient for whom you are filing more
than one Form 1098-E. Additionally, the IRS encourages you to
designate an account number for all Forms 1098-E that you file.
See part L in the 2010 General Instructions for Certain
Information Returns.

Qualified tuition and related expenses. Qualified tuition and
related expenses are tuition and fees a student must pay to be
enrolled at or attend an eligible educational institution.
The following are not qualified tuition and related expenses.
• Amounts paid for any course or other education involving
sports, games, or hobbies, unless the course or other education
is part of the student’s degree program or is taken to acquire or
improve job skills.
• Charges and fees for room, board, insurance, medical
expenses (including student health fees), transportation, and
similar personal, living, or family expenses.
Academic credit. Academic credit is credit awarded by an
eligible educational institution for the completion of course work
leading to a postsecondary degree, certificate, or other
recognized postsecondary educational credential.
Example. Student A, a medical doctor, takes a course at
University X’s medical school. Student A takes the course to
fulfill State Y’s licensing requirement that medical doctors
attend continuing medical education courses each year.
Student A is not enrolled in a degree program at University X
and takes the medical course through University X’s continuing
professional education program. University X does not award
Student A credit toward a postsecondary degree on an
academic transcript for the completion of the course but gives
Student A a certificate of attendance upon completion.
University X is not required to file Form 1098-T for the course
taken by Student A.
Academic period. You must file Form 1098-T for each
student who is enrolled in your institution for any academic
period (for example, semester, trimester, or quarter) in 2010.
Determine your enrollment for each period under your own
rules or use one of the following dates.
• 30 days after the first day of the academic period.
• A date during the period when enrollment data must be
collected for purposes of the Integrated Postsecondary
Education Data System administered by the Department of
Education.
• A date during the period when you must report enrollment
data to the state, to your governing board, or to some other
external governing body.
Additional information. For more information about reporting
on Form 1098-T, see Regulations section 1.6050S-1. Also see
Notice 2006-72, 2006-36 I.R.B. 363, available at http://www.irs.
gov/irb/2006-36_IRB/ar10.html for guidance in a question and
answer format on the information reporting requirements for
Form 1098-T.
Statements to students. If you are required to file Form
1098-T, you must provide a statement or acceptable substitute,
on paper or electronically, to the student. For more information
about the requirements to furnish a statement to each student,
see part M in the 2010 General Instructions for Certain
Information Returns.
Student’s address. In the student’s address box of Form
1098-T, enter the student’s permanent address. That is, enter
the student’s home or other long-term address where he or she
can receive forwarded mail. You may use a temporary address
only if you do not know the permanent address.
Information contact and service provider. You must provide
your name, address, and telephone number. In addition, you
may include information on a third-party service provider who
filed the form or who may answer questions about the
statement. Enter the service provider’s information in the box
below the student’s name and address.

Box 1. Student Loan Interest Received by
Lender
Enter the interest you received on a student loan(s) during the
calendar year. For loans made on or after September 1, 2004,
you are required to include loan origination fees and/or
capitalized interest in box 1. See Regulations section 1.221-1(f).

Box 2. Checkbox
Check this box if loan origination fees and/or capitalized interest
are not reported in box 1 for loans made before September 1,
2004.

Specific Instructions for Form 1098-T
File Form 1098-T, Tuition Statement, if you are an eligible
educational institution. You must file for each student you enroll
and for whom a reportable transaction is made. Also, if you are
an insurer, file Form 1098-T for each individual to whom you
made reimbursements or refunds of qualified tuition and related
expenses.
Exceptions. You do not have to file Form 1098-T or furnish a
statement for:
• Courses for which no academic credit is offered, even if the
student is otherwise enrolled in a degree program;
• Nonresident alien students, unless requested by the student;
• Students whose qualified tuition and related expenses are
entirely waived or paid entirely with scholarships or grants; and
• Students for whom you do not maintain a separate financial
account and whose qualified tuition and related expenses are
covered by a formal billing arrangement between an institution
and the student’s employer or a governmental entity, such as
the Department of Veterans Affairs or the Department of
Defense.
Who must file. You must file Form 1098-T if you are an
eligible educational institution. An eligible educational institution
that is a governmental unit, or an agency or instrumentality of a
governmental unit, is subject to the reporting requirements of
Form 1098-T. A designated officer or employee of the
governmental entity must satisfy the reporting requirements of
Form 1098-T.
Eligible educational institutions may choose to report
payments received, or amounts billed, for qualified tuition and
related expenses. The eligible educational institution must use
the same reporting method for all calendar years unless the IRS
grants permission to change the reporting method. For
information on how to obtain automatic consent to change your
reporting method, see the instructions for box 3 on page 3.
If another person receives or collects payments of qualified
tuition and related expenses on your behalf, the other person
must file Form 1098-T. However, if the other person does not
possess the information necessary to comply with the reporting
requirements of Form 1098-T, then you must satisfy the
reporting requirements of Form 1098-T.
Also, if you are an insurer engaged in a trade or business of
making refunds or reimbursements of qualified tuition and
related expenses, you are required to file Form 1098-T. See the
instructions for box 10 on page 3.
Eligible educational institution. An eligible educational
institution is a college, university, vocational school, or other
postsecondary educational institution that is described in
section 481 of the Higher Education Act of 1965 as in effect on
August 5, 1997, and that is eligible to participate in the
Department of Education’s student aid programs. This includes
most accredited public, nonprofit, and private postsecondary
institutions.

You must provide the telephone number for the
information contact at the institution. Generally this is an
CAUTION administrative office or department. Do not provide the
institution’s general telephone number.
Account number. The account number is required if you have
multiple accounts for a recipient for whom you are filing more
than one Form 1098-T. Additionally, the IRS encourages you to
designate an account number for all Forms 1098-T that you file.

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Instructions for Forms 1098-E and 1098-T (2010)

Page 3 of 3

Instructions for Forms 1098-E and 1098-T (2010)

12:15 - 29-DEC-2009

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

See part L in the 2010 General Instructions for Certain
Information Returns.

Box 5. Scholarships or Grants
Enter the total amount of any scholarships or grants that you
administered and processed during the calendar year for the
payment of the student’s costs of attendance. However, see
Exceptions on page 2.

Box 1. Payments Received for Qualified Tuition
and Related Expenses
If you use this method of reporting, enter the amount of
payments received for qualified tuition and related expenses
from any source during the calendar year. The amount reported
is the total amount of payments received less any
reimbursements or refunds made during the calendar year that
relate to the payments received for qualified tuition and related
expenses during the same calendar year.

Box 6. Adjustments to Scholarships or Grants
for a Prior Year
Enter the amount of any reduction to the amount of
scholarships or grants that were reported for any prior year after
2002.

Box 7. Checkbox for Amounts for an Academic
Period Beginning in January through March
of 2010

Box 2. Amounts Billed for Qualified Tuition and
Related Expenses
If you use this method of reporting, enter the amounts billed
during the calendar year for qualified tuition and related
expenses. The amount reported is the total amount billed less
any reductions in charges made during the calendar year that
relate to the amounts billed for qualified tuition and related
expenses during the same calendar year.

Check this box if any payments received, or amounts billed, for
qualified tuition and related expenses reported for 2010 relate
to an academic period that begins in January through March
of 2011.

Box 8. Check if at Least Half-Time Student
Check this box if the student was at least a half-time student
during any academic period that began in 2010. A half-time
student is a student enrolled for at least half the full-time
academic workload for the course of study the student is
pursuing. Your institution’s standard for a half-time student work
load must equal or exceed the standards established by the
Department of Education under the Higher Education Act and
set forth in 34 C.F.R. section 674.2(b).

Box 3. Checkbox for Change of Reporting
Method
Check this box if you have changed your method of reporting
(payments received or amounts billed). You have changed your
method if the method you are using for 2010 is different than
the method you used for 2009.
In general, you must make a written submission to the IRS at
least 3 months before the due date of the returns for the year of
the change. To change your method of reporting for 2011, you
must make the submission no later than November 28, 2011, if
you file your returns on paper (or January 3, 2012, if you file
electronically). For additional requirements, see Rev. Proc.
2005-50, 2005-32 I.R.B. 272 available at http://www.irs.gov/irb/
2005-32_IRB/ar16.html.

Box 9. Check if a Graduate Student
Check this box if the student was a graduate student. The
student is a graduate student if the student was enrolled in a
program or programs leading to a graduate-level degree,
graduate-level certificate, or other recognized graduate-level
educational credential.

Box 10. Insurance Contract Reimbursements or
Refunds

Box 4. Adjustments Made for a Prior Year
Payments received. Enter reimbursements or refunds of
qualified tuition and related expenses made during the calendar
year that relate to payments received that were reported for any
prior year after 2002.
Amounts billed. Enter any reductions in charges made for
qualified tuition and related expenses made during the calendar
year that relate to amounts billed that were reported for any
prior year after 2002.

Instructions for Forms 1098-E and 1098-T (2010)

If you are an insurer, enter the total amount of reimbursements
or refunds of qualified tuition and related expenses that you
made to the student during 2010.

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