How To Claim the Student Loan Interest Deduction

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Key Takeaways

  • The student loan interest deduction allows you to deduct the interest paid on your student loans from your taxable income. 
  • You can claim this deduction even if you use the standard deduction.
  • You can deduct up to $2,500 each year as a single person or as a married couple.
  • To be eligible, your income must not exceed a certain limit. You also can’t be claimed as a dependent on someone’s tax return and can’t file separately while married.

How Does the Student Loan Interest Deduction Work? 

The student loan interest deduction allows borrowers to reduce their taxable income by deducting interest they paid toward their federal and private student loans. You can deduct a maximum of $2,500 per year whether you’re a single filer or married filing jointly. That limit goes down once you meet certain income thresholds. 

You’ll most likely qualify for the deduction if:

  • You meet the modified adjusted gross income (MAGI) requirements for a full or partial deduction. 
  • You took out and used the loan to pay for qualified education expenses only. 
  • You were the person who took out the loan. 
  • The student loan debt was for you, your spouse, or someone who was a dependent when you took out the loan. 
  • Your filing status isn’t married filing separately. 

The income limits are adjusted for inflation, so they can change from year to year.

2022 MAGI Limits for Claiming Full or Partial Deduction
Filing Status Can Claim Full Deduction Can Claim Partial Deduction Cannot Claim Deduction
Single, qualifying widower, head of household Up to $70,000 $70,001-$85,000 More than $85,000
Married filing jointly Up to $145,000 $145,001-$175,000 More than $175,000

The limits increase for tax year 2023.

Filing Status Can Claim Full Deduction  Can Claim Partial Deduction Cannot Claim Deduction
Single, qualifying widower, head of household Up to $75,000 $75,001-$90,000 More than $90,000 
Married filing jointly Up to $155,000 $155,001-$185,000 More than $185,000 

Any kind of student loan (both federal and private) may qualify for this deduction as long as it meets the other IRS requirements. Loans that have many uses, such as credit card debt, aren't generally eligible unless strictly used to pay qualified education expenses.

There are some other important exclusions. You can’t deduct interest on loans taken out by someone else, including a relative. Nor can you deduct interest from a retirement plan loan, even if the funds were used exclusively for qualified educational expenses. Additionally, parents can't use this deduction if they took out a loan to help pay a non-dependent student's tuition.

Who Is Eligible for the Student Loan Interest Deduction?

To take advantage of this deduction, the borrower must meet the following requirements:

  • You are legally obligated to repay the qualified education loan.
  • You paid interest on a qualified student loan in the year you claimed the deduction.
  • Your filing status is single, head of household, married filing jointly, or qualifying widow(er).
  • Your modified gross adjusted income falls within the limits allowed.
  • No one can claim you as a dependent on someone else's tax return.
  • Your higher education institution qualifies to participate in a financial aid program from the U.S. Department of Education.

How Do I Take the Student Loan Interest Deduction?

If you paid $600 or more in interest, each student loan servicer is required to send you a 1098-E form reporting the amount of interest you paid by January 31. You should also be able to download your 1098-E from your loan servicer’s website. 

Use your form(s) to calculate how much you can deduct. (You can still claim interest amounts lower than $600; you’ll just need to ask your servicer for the amount you paid or consult your own records.)


Receiving the 1098-E form from your student loan servicer does not mean you are eligible to claim the student loan interest deduction. 

Enter the total amount of eligible interest you paid that year in line 21 on Schedule 1 (Form 1040). If you paid less than $2,500 in interest, your deduction is whatever amount you ended up paying. If you paid more than $2,500 in interest, you can still only claim $2,500 for the deduction.

Student Loan Interest Deduction Example

To understand how much the student loan interest deduction can save you on your tax bill based on your income level and tax bracket, you can use a simple calculation. Let's take a look at how it would work for a sample borrower. (Note that we’re not including the standard deduction or other adjustments here):

Student Loan Interest and MAGI in 2022
Taxable income $60,000
Student loan interest paid $2,500
Taxable income after deduction $57,500
Student Loan Interest Deduction Savings
Amount student paid in interest that year $2,500
Student’s tax bracket percentage x 22%
Amount the borrower saved that year $550

Additional Education Deductions and Credits

The student loan interest deduction isn't the only way the IRS helps you save money on educational costs.

American Opportunity Tax Credit (AOTC)

The American Opportunity Tax Credit is worth up to $2,500 for each qualifying student. This tax credit also phases out at certain income levels, but qualifying taxpayers can claim it for the first four years of post-secondary education. Use Form 8863 with either IRS Form 1040 or Form 1040-SR to claim this credit.

Lifetime Learning Credit (LLC)

The Lifetime Learning Credit is designed to help you cover tuition and related expenses. You’re most likely eligible for this credit if you’re taking college courses; are working on an undergraduate, graduate, or professional degree; or are taking classes to improve your job skills.

The LLC is worth up to $2,000 per year (20% of your first $10,000 of qualified expenses per year). To claim this credit, your MAGI must not exceed $90,000 or $180,000 if you’re filing jointly. Use Form 8863 to file.

Coverdell Education Savings Account (ESA)

A Coverdell Education Savings Account allows you to put aside up to $2,000 a year for a student's education expenses (elementary, secondary, college or career school). The contributions are not tax-deductible, but the distributions are tax-free as long as they are used for qualified educational expenses. These accounts can only be opened for someone who is under 18 or who has special needs. 

529 Plan

A 529 plan, also known as a qualified tuition program or QTP, is a tax-advantaged college savings program established by your state or school that allows anyone who is at least 18 and has a Social Security number (parents, other relatives, or the student themselves) to prepay or save ahead of time for education-related expenses. The contributions made to this plan are not tax-deductible, but some states offer additional tax breaks for parents who contribute to their child’s 529 plan. 

The money in a 529 account is invested, and earnings grow tax-deferred until the money is withdrawn. If the withdrawals are used to cover qualified educational expenses, they will be tax-free. 

Frequently Asked Questions (FAQs)

Is student loan interest deductible?

Yes, up to $2,500 a year in student loan interest that you have paid is deductible, as long as you meet the eligibility requirements. Requirements involve your income, tax filing status, and borrowing status, among other things.

Why is my student loan interest not tax deductible?

There are several reasons your student loan interest may not be deductible. If you are not legally obligated to repay the student loan debt and interest, it would not be tax deductible for you. In addition, if your modified adjusted gross income (MAGI) exceeds certain limits, you or your spouse is listed as a dependent on someone else’s tax return, or you are married filing separately, you may be ineligible for this deduction.

Can you deduct student loan interest without a 1098-E?

Yes, you can still deduct student loan interest without a form 1098-E. Student loan servicers are required to send borrowers that form, which reports the interest paid on a student loan. That makes it easier for you to know how much to deduct from your taxable income. But if you do not receive this form, you can call or visit your servicer's website to learn the amount of interest you paid during the year.

Is student loan interest deductible if you don't itemize?

Yes. For most taxpayers, the student loan interest deduction will still apply even if you don't itemize your deductions. The rules are the same for those who do and don't itemize deductions.

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  1. IRS. "Topic No. 456 Student Loan Interest Deduction."

  2. IRS. “26 CFR 601.602: Tax Forms and Instructions (2022).” Page 18.

  3. IRS. "26 CFR 601.602: Tax Forms and Instructions (2023)." Page 18.

  4. TaxSlayer. “Do I Qualify for the Student Loan Interest Deduction?

  5. IRS. “Publication 970, Tax Benefits for Education - Qualified Education Expenses.”

  6. IRS. “Instructions for Forms 1098-E and 1098-T (2023).”

  7. Federal Student Aid. “How To Deduct Student Loan Interest on Your Taxes (1098-E).”

  8. IRS. “Form 8863 Education Credits Form (American Opportunity and Lifetime Learning Credits).”

  9. IRS. “American Opportunity Tax Credit.”

  10. IRS. “Lifetime Learning Credit.”

  11. “Lifetime Learning Credit (LLC).”

  12. IRS. “Compare Education Credits.”

  13. IRS. “Topic No. 310 Coverdell Education Savings Accounts.”

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