How To Claim the Student Loan Interest Deduction

If you're repaying your student loans, you're likely very aware that interest costs make your loans more expensive. Many student loan borrowers, including both students and parents, are eligible to claim a tax deduction for up to $2,500 of student loan interest they paid during the tax year.

Let's take a look at key requirements for claiming the student loan interest deduction, as well as how to claim it when you file your next tax return.

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How do you claim the student loan interest deduction?

Here’s a step-by-step guide on how to claim the student loan interest deduction.

Step 1: Get your 1098-E Form(s) from your loan servicer(s)

Form 1098-E is the Student Loan Interest Statement. It includes the amount of interest paid during the specific tax year. 

Your loan servicer(s) should send you Form 1098-E by mail or email if you paid more than $600 in student loan interest during the tax year. You should also be able to access Form 1098-E by going to your loan servicer’s website and logging into your account. 

Generally, your form should be ready to download by January 31. If you have multiple student loans, such as federal and private, you will likely receive more than one form. You can use this information to report the correct amount of interest on your tax returns. 

If you paid less than $600 in interest during the tax year, you may not receive a 1098-E form. However, it’s still possible to claim the student loan interest tax deduction. Just reach out to your loan servicer to confirm how much interest you paid. 

Step 2: Check eligibility for student loan interest deduction 

Not everyone qualifies for the student loan interest tax deduction. To be eligible, you must have:

• A qualified student loan (one taken out to cover qualified higher education expenses) 
• A legal obligation to repay the loan and interest 
• Paid interest on the qualified student loan during the tax year
• Income below the modified adjusted gross income (MAGI) limits

You also must not file your taxes as married filing separately, and you can't be claimed as a dependent on someone else’s tax return (such as a parent). 

Step 3: Review the IRS income limits 

If your MAGI is below the following thresholds, you may qualify for at least a partial student loan interest deduction.  

• Less than $100,000  if your tax filing status is single or head of household.
• Less than $200,000 if you are married filing jointly

These limits are for the 2025 tax year. The income limits change each year, and you can find the details in the IRS student loan interest deduction chapter in Publication 970.

Step 4: File your tax return to claim the student loan tax deduction 

Using the information from your Form 1098-E, enter the appropriate amount for the student loan interest deduction on Form 1040, Schedule 1, line 21.

Whether you’re using tax software or working with a tax professional, the process is generally straightforward. 

What is the student loan interest deduction?

The student loan interest deduction allows qualified borrowers to deduct up to $2,500 of student loan interest paid during the tax year. If the amount of interest you paid exceeds $2,500, the maximum you can deduct is still $2,500. 

You must be eligible for the deduction based on income and tax filing status, and your deduction may be reduced or eliminated based on your income.

The deduction is an “above-the-line” deduction that doesn’t require you to itemize. By reducing your taxable income, the deduction reduces the taxes you owe. 
 

Who qualifies for the student loan interest deduction?

You may qualify for the student loan interest deduction if:

• You paid interest on qualified federal or private student loans
• You have a legal obligation to repay the loan 
• Your MAGI is below the phaseout range 
• You don’t file your taxes as married filing separately 
• You’re not claimed as a dependent on someone else’s tax return

If you don’t meet the above requirements, you can't claim this deduction. And, there may also be other restrictions as well. 

“If your employer paid the interest under a student loan repayment assistance program (LRAP), you cannot claim the student loan interest deduction on those payments,” says Mark Kantrowitz, a financial aid expert and author of books on the subject. “Loans from people related to you do not count, nor do loans from retirement plans.”

What counts as qualified student loan interest for a tax deduction?

To claim the student loan interest deduction, you must have a qualified student loan. This may include federal, private, or refinanced student loans, as long as the funds were used for qualified higher education costs such as tuition, fees, room, board, books, and other necessary costs. 

You can claim the deduction for the simple interest that accrues on any qualified loans. Kantrowitz adds, “Interest includes loan origination fees and capitalized interest.” 

How do income limits and phase-outs work for a student loan interest tax deduction? 

The student loan interest tax deduction has specific income limits. But eligibility phases out once you reach those limits, up to a set maximum income.  

“The amount of the deduction reduces once income is above $85,000 (single) or $170,000 (married filing joint). The interest deduction completely phases out at $100,000 of income for single, $200,000 for married filing jointly,” says Jack Wang, a college financial aid adviser at Innovative Advisory Group and host of the Smart College Buyer podcast. 

Those are the limits for the 2025 tax year. Limits are typically adjusted annually for inflation. For the 2026 tax year, the MAGI phaseout range for single filers is $85,000 to $100,000. For married couples filing jointly, the MAGI phaseout range is $175,000 to $205,000.