Updated October 3, 2025
Student loan debt continues to burden millions of Americans, with the Federal Reserve reporting that outstanding student loans total more than $1.6 trillion.
When it comes to managing your debt, every little bit helps. One way to pay down your debt is to claim the student loan interest tax deduction; while you can’t deduct your payments, you may be able to deduct the amount of interest you paid during the tax year (or $2,500, whichever is less). The deduction could help you reduce your tax bill, keeping more money in your pocket, but not everyone is eligible for it.
Do You Have to File Taxes For Student Loans?
As a college student, you don’t have to file a tax return just because you have student loans. Your loans are a form of debt, not income, so the loans aren’t taxable as income.
That said, some college students have to file tax returns anyway based on their income or investments. For example, if you have a side gig or part-time job and have income and make $14,600 or more per year, you’ll likely need to file a tax return.
If you’re a dependent — and most college students are — and your parents claim you on their tax returns, you’ll need to file your taxes if your earned income is over $14,600, or if your gross income (including income from investments or dividends) exceeds $1,300.
What Is the Student Loan Interest Tax Deduction?
A tax deduction reduces your taxable income, so you don’t have to pay taxes on the extra amount. As a result, you have a lower tax bill.
With the student loan interest tax deduction, you can reduce your tax bill by the amount of interest you paid on your student loans or $2,500, whichever is less. For instance, say you made $1,900 in interest payments during the tax year, and you earn $30,000 per year. The tax deduction could reduce your taxable income to $28,100, so you’d pay less tax overall.
To qualify for the deduction, you must meet the following requirements:
- You paid interest on a qualifying federal or private student loan
- You’re legally obligated to make payments on the loan
- Your filing status isn’t married filing separately
- You cannot be claimed as a dependent on someone else’s tax return
- You meet the tax deduction’s income limits
You’re eligible for up to the full tax deduction amount if your income is $80,000 if you’re single, and less than $165,000 if you’re married filing a joint return. Those who are single with incomes over $80,000, but less than $95,000, can qualify for a reduced deduction amount. The deduction isn’t available to those who earn more than $95,000.
The below table highlights the income limits for the student loan interest tax deduction based on your filing status:
| Filing Status | Income | Maximum Student Loan Interest Deduction |
| Single | Under $80,000 | Up to $2,500 or the total amount of interest paid during the tax year, whichever is less |
| $80,000 to $94,999 | Reduced deduction amount | |
| $95,000 and up | Not eligible for the deduction | |
| Married filing jointly | Under $165,000 | Up to $2,500 or the total amount of interest paid during the tax year, whichever is less |
| More than $165,000 but less than $195,000 | Reduced deduction amount | |
| $195,000 or more | Not eligible for the deduction |
What Loans Qualify for the Interest Tax Deduction?
YNot every loan qualifies you for the student loan interest tax deduction, so make sure your debt meets the criteria. Your loan must be used to pay for qualified expenses in order to be tax-deductible. Some of these expenses include:
- Tuition and fees
- Room and board
- Transportation
- Books
- Needed supplies and equipment (including a computer)
Both federal and private loans can qualify, as long as the proceeds from the loan are used for qualified education expenses. Even if you refinanced your loans, you can still qualify for the deduction.
How to Claim the Student Loan Interest Tax Deduction
Your loan servicer will send you a Form 1098-E, which shows the amount of interest you paid toward the loan during your tax year. To claim the student loan interest tax deduction, you’ll enter the amount of interest paid on your Form 1040NR or Form 1040A. If you need help handling your taxes, or claiming deductions, it can be a good idea to work with a tax professional.
Additional Tax Deductions for Students & Graduates
The student loan interest deduction isn’t the only way you can get a tax break for your educational pursuits. Some of the other tax breaks you might be able to claim include:
- American Opportunity Tax Credit (AOTC): As a tax credit, the APTC can reduce your tax bill. You can qualify for a credit of up to $2,500 if you’re in school, and the refund is refundable, so you can get money back if the credit reduces your bill to zero.
- Lifetime Learning Credit (LLC): While the AOTC is limited for a certain amount of time, you can claim the LLC for undergraduate, graduate, and ongoing continuing education courses. You can reduce your tax bill by up to $2,000, but it’s not refundable.
Note that a tax credit is a direct reduction in your tax bill, so if you qualify for a credit, it can be more valuable than a deduction.
Refinance Your Student Loans to Save More
While the student loan interest tax deduction offers a way for you to reduce your taxable income, it’s not the only way to save money as you pay down your student loan debt. Refinancing your student loans could reduce your interest rate, allowing you to save money overall and pay off your student loan debt faster. Maximize your tax deduction and take other steps to improve your finances as you tackle your student loans.
