What is the Student Loan Interest Deduction?

What is the deduction?

• Deduct up to $2,500 of student loan interest paid during the year.
• Above-the-line deduction (reduces Adjusted Gross Income).
• No itemizing required.

 
What loans qualify?

• Loan must be used solely for qualified higher education expenses.
• Student enrolled at least half-time in degree or credential program.
• Cannot be from a related party or employer plan.

 
Income limits
2025:

• Single/HOH: Full deduction ≤ $85,000 Modified Adjusted Gross Income (MAGI); phases out to $100,000.
• Married Joint Filers: Full deduction ≤ $170,000 MAGI; phases out to $200,000.
• Married Separate Filers: Not eligible.

2026:

• Single/HOH: Full deduction ≤ $85,000 MAGI; phases out to $100,000.
• Married Joint Filers: Full deduction ≤ $175,000 MAGI; phases out to $205,000.
• Married Separate Filers: Not eligible.

 
Who can claim it?

• Must be legally obligated on the loan.
• Those who cannot be claimed as a dependent by someone else.
• Parents may deduct if legally obligated and pay the interest.

 
What documentation is needed?

• Form 1098-E, if $600+ interest paid.
• Loan statements, if less than $600.

 
Other key rules

• Interest must actually be paid (not just accrued as in deferred payments).
• Refinanced loans qualify if original loan was qualified.

Updated 2/27/2026