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Message: <blockquote data-quote="Doodlestuff" data-source="post: 2458545" data-attributes="member: 209193">Your employer doesn't do anything about the $2,500.  You file that with your taxes.  It is more beneficial to pay the principle of the loan because you will reduce your interest and the ultimate cost of your loan.  If you can afford, pay extra with every payment.  You will get your loan paid off earlier, saving you a wad of cash.</blockquote>