As a parent preparing for tax season, you may be wondering if you can deduct the student loan interest you paid on the loans you borrowed for your son or daughter’s education. You can do so if certain conditions are met. Namely, the loans must be under your name AND you must be the party who paid the interest (as opposed to your son or daughter).
Qualified Student Loan
The IRS defines a qualified student loan as:
- A loan you borrowed for the sole purpose of paying for qualified higher education expenses
- A loan that is not from a relative or made under a qualified employer plan
This could apply to loans you borrowed on behalf of your son or daughter (i.e. Parent PLUS Loans), but it can also include:
- Higher education expenses for yourself or your spouse (in addition to a dependent)
Student Loan Interest Deduction
You can claim a student loan interest deduction for qualified education loans, including federal loans, private loans, and institutional loans. The maximum deduction is $2,500 per year. You must have paid at least $600 in interest during the year for monies that were used for qualified higher education expenses. If you meet this threshold, your loan servicer will provide a Form 1098-E.
Qualified Higher Education Expenses
The qualified higher education expenses for student loan interest deduction include the following:
- Tuition and fees
- Textbooks, supplies, and equipment
- Room and board (i.e. housing)
- Other necessary expenses, such as transportation
This applies to expenses paid to an ‘eligible educational institution’ which is defined as a postsecondary school (college, university, vocational school) that participates in—or is eligible to participate in—the student aid program under the Department of Education (ED).
Tax Year
To qualify for the deduction, you must have paid the minimum of $600 in student loan interest during the tax year. In other words, this is not tracked according to an academic year but a calendar year.
Tax Return
For purposes of claiming the student loan interest deduction on your tax return, you do not need to specifically itemize your deductions. This will be treated as an adjustment to income. Of course, when in doubt consult with a tax professional.
Taxable Income
Student loan interest can be deducted from your taxable income; your salary, wages, earnings from self-employment, bonuses, tips, etc. You should consult with a tax professional if you have questions about this.
Modified Adjusted Gross Income
The IRS sets the guidelines for modified adjusted gross income (MAGI) limits when it comes to student loan interest deduction. And these limits may change from one year to the next. For 2025, the following MAGI limits are in effect and cannot be exceed in order to qualify for student loan interest deductions. If you earned these limits or more, you will not be able to claim the deduction.
| Type of Tax Filer | MAGI Limits |
|---|---|
| Single* | $100,000 |
| Joint** | $200,000 |
* For single filers with a MAGI between $85K - $100K, you can claim a reduced deduction. (See the section on Student Loan Interest Deduction Phaseout below)
** For joint filers with a MAGI between $170K - $200K, you can claim a reduced deduction. (See the section on Student Loan Interest Deduction Phaseout below)
Student Loan Interest Deduction Phaseout
The American Taxpayer Relief Act of 2012 provided income restrictions on student loan interest deduction, as well as introduced phaseout ranges to address different income levels. Basically, some individuals may qualify for the full deduction or a partial deduction according to these guidelines:
| If your filing status is: | And your income is: | Then... |
|---|---|---|
| Single | <$85,000 | You can claim the full deduction |
| Married filing jointly | <$170,000 | You can claim the full deduction |
| Single | $85,000 to $100,000 | You can claim a partial deduction |
| Married filing jointly | $170,000 to $200,000 | You can claim a partial deduction |
To calculate the amount of the partial deduction, work with your tax professional. Keep in mind that additional tax breaks, such as the American Opportunity Tax Credit, may also impact the total amount you may be able to claim as tax deduction.
Married Filing Jointly
If you file your taxes under the status of “married filing jointly,” and your combined incomes do not exceed the MAGI limits, you can claim the student loan interest deduction.
Married Filing Separately
If your filing status is married filing separately, unfortunately you will not be able to claim the student loan interest deduction. The deduction can only be claimed on the following filing statuses: single, head of household, married filing jointly, or qualifying widow(er).
Dependent on Someone Else’s Return
If you have been claimed as a dependent on someone else’s tax return, you cannot use the student loan interest deduction.
Claim the Deduction!
Now that you have more insights on qualifying educational expenses and income levels, you can confidently claim the student loan interest deduction if you fall within the guidelines. We highly recommend consulting with your tax professional for help or researching additional tax information at IRS.gov.
