How to Deduct Student Loan Interest

Learn how to claim the student loan interest deduction on your taxes and maximize your savings with clear steps.

1. Check if you qualify for the deduction. You must have paid interest on a qualified student loan during the tax year. Your modified adjusted gross income (MAGI) must be below the phase-out limits — $75,000 for single filers or $155,000 for married filing jointly as of 2026. You cannot be claimed as a dependent on someone else's tax return.
2. Gather your Form 1098-E from loan servicers. Your student loan servicer will mail you Form 1098-E by January 31st if you paid $600 or more in interest. This form shows exactly how much interest you paid during the tax year. If you paid less than $600, you can still claim the deduction — just track the amount from your loan statements.
3. Calculate your deductible amount. You can deduct the smaller of two amounts: the actual interest you paid or $2,500. If your MAGI falls within the phase-out range, your deduction gets reduced. The phase-out happens gradually — at $90,000 MAGI for single filers, the deduction disappears completely.
4. Claim the deduction on your tax return. Enter your student loan interest on Schedule 1 (Form 1040), line 21. This is an above-the-line deduction, which means you can claim it even if you take the standard deduction. You don't need to itemize to get this benefit.
5. Understand what qualifies as student loan interest. Deductible interest includes interest on federal and private student loans used for qualified education expenses. Loan origination fees that are really interest in disguise also count. Interest on loans from family members, employer programs, or 401(k) loans does not qualify.