Can I deduct interest on private student loans?

Yes, interest on both federal and private student loans is deductible, as long as the loan was used to pay qualified education expenses and meets the other requirements.

What are the income limits for the deduction?

For 2024, the deduction phases out for single filers with modified AGI between $80,000 and $95,000, and for married filing jointly between $165,000 and $195,000. No deduction is available above these limits.

Can my parent deduct the interest on my student loan?

Only if the parent is legally obligated to make payments on the loan and actually makes the payments. If the loan is in your name and you make the payments, you claim the deduction — even if your parent provides you with the money.

Is interest during deferment or forbearance deductible?

Interest that accrues during deferment or forbearance is not deductible until you actually pay it. If capitalized (added to the loan balance), it becomes deductible when you pay it as part of future payments.

Education

1098-E: Student Loan Interest Statement

Reports student loan interest of $600 or more received during the tax year.

Download 1098-E PDF About on IRS.gov Instructions PDF

Overview

Form 1098-E, Student Loan Interest Statement, reports the amount of student loan interest you paid during the tax year. If you paid $600 or more in interest on a qualified student loan, your loan servicer is required to send you this form. You may use it to claim the student loan interest deduction on your tax return.

The student loan interest deduction allows you to deduct up to $2,500 of interest paid on qualified student loans as an above-the-line deduction. This means you can claim it even if you take the standard deduction — you do not need to itemize. The deduction directly reduces your adjusted gross income (AGI).

Qualified student loans include federal and private student loans used to pay for tuition, fees, room and board, books, and other qualified education expenses at an eligible institution. The loan must have been taken out solely to pay qualified education expenses for you, your spouse, or a dependent.

Who Files This Form?

Loan servicers and lenders who receive $600 or more in student loan interest payments during the year must file Form 1098-E with the IRS and provide a copy to the borrower. This includes servicers of federal student loans (such as MOHELA, Nelnet, and Aidvantage) and private student loan lenders.

Even if you paid less than $600 in interest and do not receive a 1098-E, you can still claim the deduction. Contact your loan servicer for the exact amount of interest paid. The deduction phases out for single filers with modified AGI between $80,000 and $95,000 ($165,000-$195,000 for married filing jointly) for the 2024 tax year.

Key Fields

Box 1: Student loan interest received by lender

The total amount of interest you paid on your student loan during the year. This is the starting point for your deduction.

Box 2: Checkbox if Box 1 does not include loan origination fees or capitalized interest

If checked, the amount in Box 1 may not include all deductible interest. Loan origination fees and capitalized interest may also be deductible.

Lender information

The name, address, and taxpayer identification number of the loan servicer or lender.

Borrower information

Your name, address, and Social Security number as the borrower.

Filing Deadlines

Due Date

January 31

Late Filing Penalty

Penalties range from $60 to $310 per form for late filing.

Step-by-Step Instructions

1
Receive Form 1098-E from each loan servicer (by January 31). If you have multiple loans, you may receive multiple forms.
2
Add up Box 1 from all 1098-E forms to determine your total student loan interest paid.
3
If Box 2 is checked, contact your servicer to determine if additional interest (origination fees, capitalized interest) is deductible.
4
Check your modified AGI against the income phase-out limits to determine your eligible deduction.
5
Deduct up to $2,500 (or the amount you paid, whichever is less) on Schedule 1, Line 21 of Form 1040.
6
If your income is in the phase-out range, use the Student Loan Interest Deduction Worksheet to calculate the reduced deduction.

Common Mistakes to Avoid

Not claiming the deduction because you take the standard deduction

The student loan interest deduction is an above-the-line deduction claimed on Schedule 1. You can claim it whether you itemize or take the standard deduction.

Forgetting interest on multiple loans

If you have loans with different servicers, add up the interest from all 1098-E forms. Don't miss interest paid on private student loans.

Not deducting interest when no 1098-E was received

If you paid less than $600 in interest, you may not receive a 1098-E, but you can still deduct the interest. Contact your servicer for the amount.

Claiming the deduction when filing married filing separately

The student loan interest deduction is not available if you file as married filing separately.

Not considering origination fees as deductible interest

Loan origination fees charged on federal student loans are treated as interest spread over the life of the loan. If Box 2 is checked, ask your servicer about additional deductible amounts.

Frequently Asked Questions

You can deduct up to $2,500 per year in student loan interest. This is a per-return limit, not per-loan. The deduction phases out at higher income levels.

Related Forms

1098-T

Tuition Statement

Form 1040

U.S. Individual Income Tax Return

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