A deduction that survives the standard deduction

You can deduct your student-loan interest

Most deductions vanish the moment you take the standard deduction. This one doesn’t. Up to $2,500 of the interest you paid on a student loan comes off your income as an adjustment to income— an above-the-line deduction you claim on Schedule 1 whether or not you itemize. For young, indebted, lower-earning filers that’s a rare thing: a real break you don’t have to give up the standard deduction to get.

The rule

“You may deduct the lesser of $2,500 or the amount of interest you actually paid during the year.” It’s an adjustment to income — you take it before the standard-vs-itemized choice, so it works even if you take the standard deduction.

IRS — Topic no. 456, Student loan interest deduction irs.gov

What counts — the loan and the interest

A qualified student loan is one you took out solely to pay qualified higher-education expenses— for yourself, your spouse, or someone who was your dependent when you borrowed — at an eligible school. Federal and most private student loans qualify; a loan from a relative, or from a qualified employer plan, does not.

“Interest” here is broader than the line item on your statement. Per Publication 970 it also includes a loan origination fee and capitalized interest (interest that got rolled into your principal), and it carries over when you refinance or consolidate a qualified loan. If you made voluntary interest payments while in school or during a grace period, those count too.

IRS — Publication 970, ch. 4 irs.gov

The paper: Form 1098-E

Your loan servicer does most of the arithmetic for you. “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” — on paper or in your servicer’s online portal. Box 1 is the number you deduct.

The $600 catch

$600 is the servicer’s reporting threshold, not a floor on your deduction. If you paid lessthan $600, no 1098-E is mailed — but you can still deduct that interest. Pull your servicer’s year-end statement, add up what you paid, and claim it. Don’t let a missing form talk you out of a real deduction.

IRS — About Form 1098-E irs.gov

The income phase-out

The deduction shrinks and then disappears as your modified adjusted gross income (MAGI) climbs into a band the IRS adjusts for inflation each year. Inside the band you get a partial deduction; above it, none. For tax year 2025 the bands are:

Single / Head of household

Gone at $100,000

Full below $85,000 · partial from $85,000 to $100,000 · nothing at or above $100,000.

Married filing jointly

Gone at $200,000

Full below $170,000 · partial from $170,000 to $200,000 · nothing at or above $200,000.

These figures move every year with inflation — confirm the current band before you rely on it. There is no separate married-filing-jointly cap on the interest itself: it’s still one $2,500 maximum per return.

IRS — Publication 970, ch. 4 (2025) irs.gov

The traps

Married filing separately kills it. If your filing status is married filing separately, you can't take the deduction at all — a real cost to weigh if you're deciding between joint and separate returns.
Being a dependent kills it. If you (or a jointly-filing spouse) can be claimed as a dependent on someone else's return, you can't claim it — even if you're the one who paid.
Only the borrower who paid may claim it. You must be legally obligated on the loan AND have actually paid the interest. A parent who pays a loan that's in the child's name can't deduct it; a co-signer only deducts what they themselves were obligated on and paid.

IRS — Topic no. 456 irs.gov

The move

Pull your 1098-E and claim it the same sitting.

Log in to your loan servicer, grab your Form 1098-E or year-end interest statement, and a free VITApreparer can enter it in the same appointment — it’s one number on Schedule 1. This is the deduction for interest on loans in good standing: money you chose to pay down. It is a different story from having a refund seized to cover a defaultedloan through the Treasury Offset Program — if that’s your situation, the deduction isn’t the page you need. Here, the interest is a break you’ve earned.

Start your free intake