Education Funding
beginner · $0 - $50K
You can deduct up to $2,500 in student loan interest as an "above the line" deduction - meaning you get it even if you take the standard deduction.
Phase-out: $85K-$100K single / $175K-$205K married (2026).
Annual Limit
$2,500 maximum deduction
Tax Benefit
Deduct up to $2,500 in student loan interest from income
Requirements
- Paid interest on qualified student loan
- MAGI under $100K single / $205K married (2026); phases out from $85K / $175K
- Legally obligated to pay the loan
- Cannot be claimed as dependent
How to Implement
- 1Receive Form 1098-E from loan servicer
- 2Verify income within limits
- 3Enter interest paid on Schedule 1 (Form 1040)
- 4Reduces taxable income directly
Frequently Asked Questions
Educational Only: This information is for educational purposes. Consult a qualified financial advisor or tax professional before implementing.
Last reviewed: April 2026
Related education funding strategies
529 Education Savings PlanTax-free growth for education expenses, plus state tax deductions in many states.American Opportunity Tax Credit (AOTC)Get up to $2,500/year credit for college costs - 40% is refundable.Lifetime Learning CreditTaking ANY courses to improve skills? Get up to $2,000 credit - no degree needed.
Sources
- Internal Revenue Service, Rev. Proc. 2025-32
2026 inflation-adjusted amounts (tax brackets, standard deduction, estate & gift, FSA, credits)
- Internal Revenue Service, Notice 2025-67
2026 retirement plan limits (401(k), IRA, SIMPLE, catch-up)
- Internal Revenue Service, Rev. Proc. 2025-19
2026 HSA and HDHP inflation-adjusted limits
Educational information only. Not financial, tax, or legal advice or a recommendation. Figures are drawn from the primary sources cited above; verify current amounts with the source before acting.