Can I get a student loan interest tax deduction?

Student loan debt can feel overwhelming, but taking advantage of certain Internal Revenue Service tax benefits and tax deductions can help make repayment more affordable. If you made student loan interest payments on a private or federal loan during the last tax year, you may be able to claim an interest deduction of up to $2,500. There are eligibility requirements, so if your taxable income is too high, you may not qualify.

Is student loan interest tax deductible?

You can generally get a standard deduction of the lesser of $2,500 or the actual interest you paid on your eligible student loans during the tax year. However, your deduction amount may be limited if your income is too high.

Note that the student loan interest tax deduction is an "adjustment to income," also known as an above-the-line deduction. This means you don't need to itemize the deduction to take advantage of it.

Not everyone will qualify for the tax deduction. To claim the full $2,500 deduction, your modified adjusted gross income (MAGI) must be $75,000 or less. If your filing status is married filing jointly with your spouse, it must be $155,000 or less.

If you're above that income limit threshold, your deduction starts to phase out. So if you earn more than $90,000 ($185,000 for joint returns), your deduction is zero. If you're married and filing separately, you won't be eligible for the deduction.

You must also meet the following requirements to claim the interest deduction:

• The education expenses paid for with the loan were for you, your spouse, or a dependent.
• The loan funds were used within a reasonable amount of time for a dedicated academic period.
• The student was enrolled at least half-time in a program leading to a degree or certificate.
• The funds were used for qualified educational expenses, such as tuition, books, supplies, or room and board.

Related: 10 strategies to help pay off student loans

How to claim the student loan interest tax deduction

If you paid more than $600 in student loan interest, your student loan servicer should send you Form 1098-E, showing how much interest you paid during the year. You can use this form to complete your tax return.

If you don't receive Form 1098-E, you can find out how much interest you paid by logging in to your account at StudentAid.gov (for federal student loans) or your lender's website (for private student loans).

You may receive several 1098-E forms if you have multiple student loans or if you refinanced your education loans during the year.

To claim the student loan deduction, you'll need to file Schedule 1 with your Form 1040. If you prepare your tax return by hand, complete the Student Loan Interest Deduction Worksheet in the Form 1040 instructions to calculate your deduction. If you use tax software like Turbotax to file your return, the software should walk you through entering the right information and fill out the correct forms for you.

More education tax breaks to claim

The student loan interest tax deduction is only one tax break you can claim for educational expenses. Here are some others:

Lifetime learning credit

The lifetime learning credit (LLC) is available to undergraduate, graduate, or professional students. The credit is worth up to 20% of your first $10,000 of qualified education expenses or a maximum of $2,000 per tax return. You can claim it for an unlimited number of years.

To be eligible, you must:

• Pay qualified educational expenses for yourself, your spouse, or a dependent.
• Be enrolled at an eligible educational institution (this applies to the student) — any college, university, or other postsecondary educational institution eligible to participate in the U.S. Department of Education’s student aid program.

Your available lifetime learning credit is gradually phased out if your MAGI is more than $80,000 ($160,000 if filing a joint return).

American opportunity tax credit

The American opportunity tax credit (AOTC) is worth up to $2,500 per student during the first four years of their undergraduate education. It’s a refundable credit, meaning if it takes your tax liability below zero, you can have up to $1,000 of it refunded to you.

To be eligible, the following must be true:

• You pay qualified education expenses for yourself, your spouse, or a dependent.
• The student must be enrolled at least half-time for one semester (or other academic period) during the tax year, and not have completed their fourth year of higher education at the start of the tax year.
• The student had no felony drug convictions at the end of the tax year.

FAQ

Are student loan payments tax deductible?

Student loan payments aren't tax deductible, but the interest you pay may be. If you meet the student loan interest deduction requirements, you may be able to deduct up to $2,500 in student loan interest paid, potentially lowering the amount of tax you owe or qualifying for a bigger tax refund.

Can I deduct student loan interest in 2024?

When you file your federal tax return in 2024, you can deduct the student loan interest you paid in 2023 (if you qualify to do so). Since student loan payments were paused for a portion of 2023, many taxpayers with only federal student loans won’t come close to the $2,500 cap. You may only deduct the interest actually paid during the 2023 tax year.

Is it worth claiming student loan interest on taxes?

Yes, it’s worth claiming student loan interest on taxes. Not only does it make your student loans more affordable, but it lowers your tax liability. Depending on where you are in the tax bracket, the modified adjusted gross income (MAGI) after the above-the-line deduction could lower your tax bracket and save you even more money.

Is parent student loan interest tax deductible?

Interest paid on parent PLUS loans is tax deductible and included in the $2,500 annual maximum allowed per year if you make less than $75,000 (if a single filer) or $155,000 (if filing jointly).

Do I have to report my student loans on my tax return?

You aren’t obligated to report your student loans on your tax return, but if you don’t, you could miss out on a valuable interest deduction that could lower your tax liability.