Key Takeaways
You can deduct up to $2,500 of student loan interest as an above-the-line deduction, so you don’t need to itemize to claim it.
To qualify, your MAGI must fall below the annual income threshold and you can’t be married filing separately or claimed as someone else’s dependent.
Use Form 1098-E to report how much interest you paid, then follow the instructions for determining your allowable deduction amount.
How Much Is The Student Loan Interest Deduction?
The student loan interest deduction allows you to claim interest you paid on a qualified student loan. It is an adjustment to your income, so you can take the deduction (if eligible) whether you itemize or not. You may deduct up to $2,500 or the actual amount of interest you paid over the tax year, whichever is smaller.
Who is Eligible For The Student Loan Interest Deduction?
To claim the student loan interest deduction on your tax return, all of the following must apply:
- You paid interest on a qualified student loan during the tax year.
- You are legally required to pay the interest.
- Your filing status is not married filing separately.
- Neither you nor your spouse (if filing together) can be claimed as a dependent on another taxpayer’s return.
- Your modified adjusted gross income (MAGI) does not exceed the income threshold for your filing status (see chart below).
Student Loan Interest Deduction MAGI Limits (2025)
| Filing Status | MAGI – Full Deduction | MAGI – Partial Deduction | MAGI – No Deduction Allowed |
| Single, Head of Household, or Qualifying Surviving Spouse | Less than $85,000 | $85,000 to $100,000 | More than $100,000 |
| Married Filing Jointly | Less than $170,000 | $170,000 to $200,000 | More than $200,000 |
If your MAGI falls within the “partial deduction” range (phaseout), you can use IRS Publication 970 to calculate your total allowable amount (or see our instructions under “How to Claim The Deduction”). Those whose MAGI exceeds the income threshold are ineligible to take the student loan interest deduction.
What is a Qualified Student Loan?
Interest paid on a private or federal student loan qualifies for the deduction if the loan was used to pay qualified educational expenses for you, your spouse, or your dependent at an eligible school. The loan must also be for an academic period, and the eligible student must be enrolled at least half-time.
This means that student loans (in your name) used to help your child pay for college, including Parent PLUS loans, are eligible for the student loan interest deduction. If you’re making payments on loans under your child’s name, however, you can’t deduct the interest on your return. Your child, if claimed as a dependent on your return, would also be ineligible for the deduction. Loans provided by employers or your relatives do not qualify for the student loan interest deduction.
Accredited post-secondary institutions, whether public, private, or non-profit, are considered eligible schools. To verify a college or university is an eligible institution, refer to the Database of Accredited Post-Secondary Institutions and Programs or the Federal Student Loan Program List.
Which Expenses Qualify For The Student Loan Interest Deduction?
For the student loan interest deduction, qualified educational expenses may include amounts paid for any of the following items:
- Tuition and fees
- Room and board (living expenses)
- Books and supplies
- Equipment (computers, calculators, etc.)
- Other necessary expenses (such as transportation)
Room and board expenses may not exceed the greater of the allowance determined by the eligible institution or the actual amount charged (if the student is living in accommodations owned/operated by the eligible institution).
How to Claim The Deduction
If you meet the eligibility and income requirements, claiming the student loan interest deduction is fairly easy. Your tax preparation software will calculate the amount for you. If you’re going old school and filing by paper, however, there are a few more steps.
1. Determine Your Interest Amount
If you paid interest on a qualifying student loan, and the amount is over $600, you should receive Form 1098-E, Student Loan Interest Statement, from your student loan lender/servicer. The form is sent by postal mail or email in January each year. If you do not receive the form by mid-February, contact your servicer and request a copy. You can also log in to your account and download the form. Additionally, if you paid less than $600 in interest, you’ll need to access your account or contact your servicer to determine the amount paid.
The total paid in student loan interest is listed in Box 1 of Form 1098-E. You’ll receive a separate Form 1098-E from each loan servicer (not per loan). Add the amounts (box 1) from all forms to determine the total interest paid for the tax year.
2. Calculate Your Deduction
As we mentioned earlier, you can claim either the total interest paid or up to $2,500 (whichever is less) if you meet the MAGI limits for the full deduction.
If your MAGI falls in the partial deduction limits (phaseout), you’ll need to multiply your interest amount by a fraction to determine your deduction amount. This is calculated by taking your MAGI and subtracting $85,000 (or $170,000 if filing jointly). Then, divide that number by $15,000 ($30,000 for joint returns). Once you have the fraction, multiply that by your interest to determine your allowable student loan interest deduction.
Example 1
During 2025, you paid $900 in interest on a qualified student loan. Your MAGI is $90,000, and you are filing as single.
- $90,000 (MAGI) minus $85,000 = $5,000
- $5,000 divided by $15,000 = .33
- $900 (interest) multiplied by .33 = $297
- $900 minus $153 = $603
Using the formula above, you’d be able to claim $603 for the student loan interest deduction.
Example 2
During 2025, you paid $1,700 in interest on qualified student loans for you and your spouse. Your combined MAGI is $190,000, and you are filing jointly.
- $190,000 (MAGI) minus $170,000 = $20,000
- $20,000 divided by $30,000 = .67
- $1,700 (interest) multiplied by .67 = $1,139
- $1,700 minus $1,139 = $561
Using the formula above, you’d be able to claim a total of $561 on your joint return.
Get Help With Your Taxes
Trying to determine which tax deductions and credits you’re eligible to take? You don’t have to do it on your own. Tax Defense Network offers affordable tax preparation services for individuals and small business owners. Give us a call today at 855-476-6920 for a free consultation and quote.