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  • Writer's pictureJames D. Lynch

Student Loan Interest Deduction

If you are repaying student loans, you can deduct up to $2,500 of student loan interest paid during the year. You will receive Form 1098-E (Student Loan Interest Statement) in the mail from the loan company showing the amount of interest you paid on your eligible student loans during the previous tax year.

Note that if your adjusted gross income on your tax return is $80,000 or more if single, head of household, or qualifying widow(er), or $160,000 or more if married filing jointly, you cannot take this deduction. If you file as married filing separately, you cannot deduct any student loan interest, regardless of your income. In addition, if you are a dependent for whom someone else claims an exemption for you on a tax return, you may not deduct your student loan interest.

If interest was not paid for the year (for example, because the loans were in deferment or forbearance), you cannot take this deduction, despite the fact that interest may continue to accrue during the deferment or forbearance period. You can only deduct interest that was paid.

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