How much can you deduct?
The deduction is the smaller of the interest you actually paid during the year or $2,500. It is not per loan — $2,500 is the total limit per tax return. A married couple filing jointly gets a single $2,500 limit.
Income phase-out
The deduction phases out as modified adjusted gross income (MAGI) rises. For tax year 2025, the phase-out range began at $85,000 for single filers and $170,000 for joint filers, and the deduction was fully phased out at $100,000 and $200,000 respectively. These ranges are adjusted for inflation periodically, so confirm the amounts for the year you file in IRS Publication 970. If you are married filing separately, you cannot take the deduction.
Who qualifies?
- You paid interest on a qualified student loan — a loan taken out solely to pay qualified higher-education expenses for you, your spouse or a dependent.
- You are legally obligated to pay the loan.
- Your filing status is not married filing separately.
- You cannot be claimed as a dependent on someone else’s return.
Parents paying a child’s loan
If a parent takes out the loan and pays it, the parent may deduct the interest if they claim the student as a dependent. If the student is legally responsible and a parent pays, the IRS treats it as if the parent gave the money to the student and the student paid the interest, and the student can deduct it unless claimed as a dependent. See Publication 970 for the details.
What counts as interest?
Interest you paid on the loan, including capitalized interest and certain fees such as loan origination fees treated as interest. Principal payments are not deductible. Voluntary extra payments toward principal do not increase the deduction.
Form 1098-E and what if you didn’t receive one
Lenders send Form 1098-E when you paid $600 or more in interest. If you paid less, you can still deduct it — check your loan servicer’s online account for the interest paid. Our document checklist includes this form.
Autopay interest rate discounts
Some servicers give a rate reduction for autopay. That doesn’t change the deduction: you deduct the interest you actually paid.
How to claim it
Enter the deduction on Schedule 1 of Form 1040 (in the adjustments section). Tax software will ask for your 1098-E amounts. Forgiven loans can be taxable in certain cases, so check IRS guidance.
Related benefits
Education credits like the American Opportunity Tax Credit and Lifetime Learning Credit are different benefits with their own rules; you can’t double-dip on the same expenses. See IRS Publication 970.
Frequently asked questions
What is the maximum student loan interest deduction?
$2,500 per tax return, limited by income.
Can I deduct student loan interest if I take the standard deduction?
Yes. It is an adjustment to income, not an itemized deduction.
What if my loan is in forbearance?
Interest that accrues but you do not pay is generally not deductible until you pay it. Check IRS Publication 970.
Official sources
- IRS Topic 456: Student loan interest deduction
- IRS Publication 970: Tax benefits for education
- IRS: Form 1040 instructions
General information only — not tax, legal or financial advice. Tax figures change every year; verify the current numbers at IRS.gov or with a qualified professional. Read the full disclaimer.