If a taxpayer’s modified adjusted gross income (MAGI) in 2017 is less than $80,000 ($165,000 if filing a joint return), there is a special deduction allowed for paying interest on a qualified student loan used for higher education. This may include both required and voluntary interest payments. Eligible taxpayers can claim this deduction even if they don’t itemize their deductions on Form 1040 Schedule A.

  • Qualified Student Loan is a loan:
    • Taken out solely to pay qualified education expenses that were for the taxpayer, their spouse or a person who was their dependent when they took out the loan.
    • Paid or incurred within a reasonable period of time before or after the taxpayer took out the loan.
    • For education provided during an academic period for an eligible student.
    • From someone other than a relative.
    • That is not taken from a qualified employer plan.
  • Qualified Education Expenses include amounts paid for the following items:
    • Tuition and fees.
    • Room and board.
    • Books, supplies and equipment.
    • Other necessary expenses, such as transportation.
Student Loan Interest Deduction