Another tax question. Am I still considered a full-time student?

How does student loan consolidation affect the federal student loan interest tax deduction?

• Ok, some details: 1) I have a federal Stafford loan and several Wells Fargo loans which I'm looking to consolidate all into one Wells Fargo loan. 2) Before you begin, I couldn't care less about all these "benefits" that come with the federal loan. The only benefit I care about is the Federal Student Loan Interest Deduction. 3) I know for a fact that all interest accrued (and paid) on the consolidated loan WILL BE deductible according to the FSLI deduction, AFTER consolidation takes place. 4) What I don't know, is this: Currently, my unconsolidated student loans have accrued about $7000 of interest thus far. I know that if I don't consolidate, all of this $7000 will be tax-deductible when I pay it (up to $2500 a year). However, the big question in my mind is, will this $7000 STILL be tax-deductible AFTER I consolidate? Or, will only NEW interest acquired AFTER the point of consolidation be considered tax-deductible? Chapter 4 of Form 970 doesn't have this example anywhere. I tried calling the IRS directly to get a straight answer on this. The representative I talked to didn't know and said they'd do some research and get back to me. After three weeks, an extremely formal gentleman from the IRS called me and gave me an extremely vague and confusing answer. He said that it all comes down to the verbiage of the specific consolidation contract. If the contract states that the consolidation "combines the original principle and the original interest", then, that $7000 will not be tax-deductible. If the contract states that it "keeps separate the original principle and the original interest", then, that $7000 all still falls under the deduction. Unfortunately, that answer doesn't seem to jive with common sense based on what form 970 says, nor did I think to ask the representative, "what if the contract doesn't specify either of the conditions you gave?" Does the categorization of the interest default to one condition or the other? I don't know. The IRS rep referenced U.S. Code 26 section 126 in response to how his answer was formed. I looked through that code and despite the fact that it's written like trash I couldn't formulate any language which would stipulate that my $7000 would no longer be tax deductible after consolidation, but then again I'm not a lawyer. What I'm looking for here is somebody with real-world experience with this, and KNOWS whether or not this interest is still tax-deductible after consolidation. You would think this would be a fairly common answer, but yet I cannot seem to find anyone who actually knows.

• Answer:

  when you consolidate the loan essentially you have paid off the student loan and there is no further credit of student loan payments your consolidated Wells Fargo is a personal loan and the interest is not deductible ie if you have several accounts with credit cards that you charged things on, the credit card company has paid those bills for you and they are out of the picture, now you have them consolidated into one loan and you now owe the one credit card company(or Wells Fargo) with no determination of what it is for other than a total amount of money--the bills you charged were paid off with the consolidation