The student loan interest deduction is an advantageous "above the line" deduction that you can claim without itemizing. You can claim it and itemize or take the standard deduction, too. It's tucked into the "Adjustments to Income" section of Schedule 1 of the 2019 Form 1040.﻿﻿

It reduces your adjusted gross income (AGI) so you pay taxes on less, and a lower AGI can directly affect your eligibility for numerous other deductions and tax credits as well.

Are You Eligible?

You can deduct interest on student loans paid by you if you use the single, head of household, or qualifying widow(er) filing status, or by you or your spouse if you file a joint return. You can't claim the student loan interest deduction if you file a separate married return, and you can't be claimed as a dependent on anyone else's tax return. ﻿﻿

You must also be legally obligated to repay the loan. This means that you—or your spouse if you file a joint return—are the signatories on the loan. You can't claim the deduction if your child takes out the loan in their own name and is the obligor, even if you make the payments for them. Only they can do so, provided, of course, you're not claiming them as a dependent.

The IRS provides an interactive tool to help taxpayers determine if they're eligible. It takes about 10 minutes to complete and you'll need your income information, including your AGI, your filing status, and a list of expenses that the loan or loans paid for.

The student must have been enrolled at least half-time in a degree program when they paid higher education expenses.﻿﻿

Student Loans That Qualify

The loan must be a qualified student loan for the benefit of you, your spouse, or your dependent. Loans from a qualified employer plan don't count, nor do private loans from family or friends.﻿﻿

The loan proceeds must be entirely dedicated to qualified education expenses. You'll lose the deduction if you borrow $10,000 but use only $9,000 toward qualified expenses and "cash-out" the remaining $1,000.

Qualified expenses include:

Tuition

Room and board

Books, supplies, and equipment

Transportation

Fees ﻿ ﻿

These expenses pertain specifically to the student loan interest deduction. They aren't necessarily the same as those that qualify for other education tax breaks.

How Much Is the Deduction?

The most student loan interest you can claim as a tax deduction is $2,500 as of the 2019 tax year, and your deduction might be less.﻿﻿ It can be limited by your income. It's reduced for taxpayers with modified adjusted gross incomes (MAGIs) in a certain phase-out range and is eventually eliminated entirely if your MAGI is too high.

Student Loan Interest Deduction Phase-Outs

The phase-out ranges for the 2019 tax year depending on your filing status:﻿﻿