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Student Loan Interest Expense

The adjustment for education loan interest is limited to $2,500.

  • All interest payments qualify for adjustment.
  • It is phased-out for AGI (2012) between:

    Single: $60,000 – $75,000
    Married: $125,000 – $155,000

  • If filing as married, must file jointly to claim the married deduction.
  • A dependent may NOT claim the adjustment
  • The taxpayer must be legally obligated to pay the loan. For e.g. interest paid by a parent on a child’s student loan will not qualify as an allowable adjustment.
  • Interest is only deductible on loans incurred by taxpayer solely to pay for qualified education expenses. For e.g. general loans such as home equity or line of credit would not qualify.


1098-E – Student Loan Interest
Publication 970 – Tax Benefits of Education

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