How Can I Claim an Interest Tax Deduction for Student Loan Debt?

In 2019, IRS tax law allows you to claim a student loan interest deduction of $2,500 on your 2018 Taxes, as long as you and your student loans meet certain eligibility criteria.

Everyone is always looking for ways to reduce their tax liabilities, but many people have no idea that this significant tax deduction is widely available.

In fact, the $2,500 deduction can be utilized by holders of both Federal and Private student loan debt, as long as they meet the conditions outlined below.



Eligibility for the $2,500 Student Loan Tax Deduction

If you made interest payments on a student loan in 2018, then you might be able to claim a deduction of up to $2,500 on your tax return filed for 2019.

The best part about this program is that you can claim the deduction as an adjustment to your income, so you don’t even have to itemize your deductions in order to qualify for this program.

However, eligibility for this deduction is relatively limited, and to claim this tax break legally, you’ll need to meet all of the following conditions:

  • You paid interest on a qualifying student loan during the 2018 tax year
  • You were legally obligated to pay interest on the qualifying student loan (meaning that you were the person primarily responsible for paying off the debt – if you were paying off your friends loan, or even your child’s loan, this program might not be eligible to you)
  • You are not filing taxes as married, filing separately (any other filing status is eligible)
  • Your modified adjusted gross income is less than $70,000 (for single taxpayers) or less than $145,000 (for those married, filing jointly)
  • You are not being claimed as a dependent on anyone else’s tax return

But Before I Explain the Rest of the Details…

Let me clue you in on something really important – if you’re facing significant financial problems because of your student loans, then you need to look into other options for finding both short-term and long-term financial relief.

If you're truly struggling with student debt, then you should also consider paying a Student Loan Debt Relief Agency for help. Why? Because the people working at these companies deal with student loans all day, every day, and they're your best chance at figuring out how to get your loans back under control.

I've interviewed all sorts of debt relief agencies over the past 10 years, talking to all sorts of so-called "experts", and I can tell you that in all honesty I've only found two companies I trust to offer actual financial relief to people struggling with student loans.

For help with FEDERAL Student Loans: Call the Student Loan Relief Helpline at 1-888-906-3065. They will review your case, evaluate your options for switching repayment plans, consolidating your loans, or pursuing forgiveness benefits, then set you up to get rid of the debt as quickly as possible.

For help with PRIVATE Student Loans: Call McCarthy Law PLC at 1-877-317-0455. They will negotiate with your lender to settle your private loans for much less than you owe, then get you a new loan for the much lower, settled amount. NOTE: McCarthy Law can ONLY help with Private student loans.

If you do decide to call one of these companies and you have a bad experience with either of them, PLEASE make sure to come back and let me know about it in the Comments!


What Counts as a “Qualifying” Student Loan?

Not all student loans are eligible to take advantage of this interest tax write off.

In fact, the IRS makes it quite clear that qualified student loans are loans that were taken out “solely to pay qualified higher education expenses”, as defined in their Publication 970, and Form 1040 Instructions.

To save you the trouble of having to look up those documents and check out their information, here’s the types of expenses that qualify:

  • Tuition costs
  • Room and board
  • Books
  • Supplies
  • Transportation
  • Miscellaneous expenses (that can be tied directly to the costs of higher education)

The good news is that virtually all student loans satisfy these conditions, unless you’ve been gaming the system and using your student loan money to pay for expenses that it’s not supposed to be spent on.


How Do I Actually Claim The Deduction?

First, you have to calculate how much of the $2,500 you can actually claim.

The rule is that you get to deduct the “lesser of $2,500 or the amount of interest you actually paid”.

What that means is, if you only paid $500 in interest, then you’ll only be able to deduct $500 from your return. However, if you paid $5,000 in interest, you’ll still only be able to claim that maximum cap of $2,500.

Once you know how much you’ve paid in interest, you can simply write that amount (or the max of $2,500), on your tax return in the field that allows you to make adjustments to your taxable income.

It’s that easy!

Other Tax Credits for Students

For those of you still attending school (or paying for someone else to attend school), we’ve got even better news!

This year offers a variety of significant opportunities to further reduce your costs by taking advantage of some other excellent tax deductions for students as well.


What if I Have Other Tax-Related Questions?

After realizing how popular this page of my website was, I decided that to set up a sister site to Forget Student Loan Debt, focusing on Tax-related issues.

Accordingly, I’ve build Forget Tax Debt, where I offer comprehensive Guides to IRS and tax-related problems, just like I’ve done here for years.

If you’re having trouble with the IRS, or if you have any questions about the tax filing process, tax debt, back taxes, or other similar topics, then please make sure to visit Forget Tax Debt for help!

Some of my most popular Guides on Forget Tax Debt include ultra-complicated tax-related topics like Negotiating an IRS Settlement, applying for the IRS Fresh Start Program, qualifying for IRS Tax Debt Forgiveness and even avoiding IRS Phone Scams.

Please visit Forget Tax Debt to get help on these topics and others!



What if I Have Other Questions About Student Loans?

You’ve come to the right place! My built this website to cover all facets of the student loan repayment process, and have developed comprehensive Guides to all sorts of Federal and Private student loan-related problems.

If you need Federal Student Loan Debt Relief, you’ll want to look at my Guides on:

And if you need Private Student Loan Debt Relief, you’ll want to look at my Guides on:

If you still have other questions about student loan debt, then please feel free to ask them in the Comments section below.

I review comments daily, and will get you a reply within 24 hours!

Please Help Me Out!

If this page helped you better understand the Student Loan Interest Tax Deduction Program, then please do your part to help me out by sharing it with our friends and family.

Post it to Facebook, Twitter or Google+, and help me spread the word about this important, lucrative program.

The more people that visit my site, the more time I can dedicate to writing high quality content like this, and teaching people like you how to save more money!


Disclaimer:Information obtained from Forget Student Loan Debt is for educational purposes only. You should consult a licensed financial professional before making any financial decisions. This site receives some compensation through affiliate relationships. This site is not endorsed or affiliated with the U.S. Department of Education.

By: 

Tim's experience struggling with crushing student loan debt led him to create the website Forget Student Loan Debt in 2011, where he offers advice, tips and tricks for paying off student loans as quickly and affordably as possible.