Topic no. 456, Student loan interest deduction

Student loan interest is interest you paid during the year on a qualified student loan. It includes both required and voluntarily prepaid interest payments. You may deduct the lesser of $2,500 or the amount of interest you actually paid during the year. The deduction is gradually reduced and eventually eliminated by phaseout when your modified adjusted gross income (MAGI) amount reaches the annual limit for your filing status.

You claim this deduction as an adjustment to income, so you don't need to itemize your deductions.

You can claim the deduction if all of the following apply:

  • You paid interest on a qualified student loan in tax year 2023;
  • You're legally obligated to pay interest on a qualified student loan;
  • Your filing status isn't married filing separately;
  • Your MAGI is less than a specified amount which is set annually; and
  • Neither you nor your spouse, if filing jointly, were claimed as dependents on someone else's return. Another taxpayer is claiming you as a dependent if they list your name and other required information on page 1 of their Form 1040, 1040-SR, or 1040-NR.

A qualified student loan is a loan you took out solely to pay qualified higher education expenses that were:

  • For you, your spouse, or a person who was your dependent when you took out the loan;
  • For education provided during an academic period for an eligible student; and
  • Paid or incurred within a reasonable period of time before or after you took out the loan.

See Publication 970, Tax Benefits for Education, the Instructions for Form 1040 (and Form 1040-SR) or the Instructions for Form 1040-NR to determine if your expenses qualify.

If you file a Form 2555, Foreign Earned IncomeForm 4563, Exclusion of Income for Bona Fide Residents of American Samoa, or if you exclude income from sources inside Puerto Rico, refer to "Worksheet 4-1, Student Loan Interest Deduction Worksheet" in Publication 970 instead of the worksheet in the Instructions for Form 1040 (and Form 1040-SR).

If you paid $600 or more of interest on a qualified student loan during the year, you should receive a Form 1098-E, Student Loan Interest Statement from the entity to which you paid the student loan interest.

For more information about the student loan interest deduction and how your MAGI affects the deduction amount, refer to Publication 970 PDF and Can I claim a deduction for student loan interest?