Student Loan Interest Deduction 2026: Income Limits and Form 1098-E

Information checked: 2026-09-09 · Maintenance label: Annual variable values

The student loan interest deduction lets you deduct up to $2,500 of interest paid during the year, and unusually, you do not have to itemise to claim it.

That last point is what makes it worth knowing. It is an adjustment to income, so it works alongside the standard deduction rather than competing with it.

This guide covers the 2026 income limits, what counts as qualified interest, and the Form 1098-E threshold that means some borrowers never receive a statement at all.

Key takeaway

Deduct the lesser of $2,500 or the interest you actually paid. For 2026 the deduction phases out between $85,000 and $100,000 of modified adjusted gross income, or $175,000 to $205,000 filing jointly. You cannot claim it filing married separately, or if someone else can claim you as a dependent. You receive Form 1098-E only if you paid $600 or more in interest.

Table of contents

• The 2026 income limits
• Why it works with the standard deduction
• What counts as a qualified loan
• Form 1098-E and the $600 threshold
• Who cannot claim it
• Frequently asked questions
• Summary

Related guides

• PSLF Eligibility 2026: Employer, Loan, and Payment Requirements — If your employer might make the balance forgivable
• Income-Driven Repayment Plans 2026: How to Compare Payments and Forgiveness — How your plan choice changes the interest you pay

The 2026 income limits

Filing status	Deduction begins to reduce	Deduction gone
Single, head of household, qualifying surviving spouse	$85,000	$100,000
Married filing jointly	$175,000	$205,000

Between those two figures the deduction shrinks proportionally rather than disappearing at once. Married filing separately is not eligible at any income.

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Why it works with the standard deduction

Most tax breaks for interest require itemising. This one does not. The IRS treats it as an adjustment to income, which means you subtract it before arriving at adjusted gross income and still take your full standard deduction.

For 2026 the standard deduction is $16,100 for single filers, $32,200 for joint filers and $24,150 for heads of household. Because the student loan interest deduction sits outside that comparison entirely, a borrower who takes the standard deduction loses nothing by claiming it.

Reducing adjusted gross income can also have knock-on effects, since other credits and thresholds are calculated from that figure.

What counts as a qualified loan

The loan must have been taken out solely to pay qualified higher education expenses, for yourself, your spouse, or someone who was your dependent when the loan was taken out. The costs must have been paid within a reasonable period around the loan being taken out.

• Federal and private student loans can both qualify, provided the purpose test is met
• A loan from a relative does not qualify
• A loan from a qualified employer plan does not qualify
• A refinanced or consolidated student loan generally continues to qualify, provided it was used only for education costs

That last point matters if you refinanced into a general-purpose loan or combined education debt with other borrowing. Mixing purposes can disqualify the interest.

Form 1098-E and the $600 threshold

If you paid $600 or more of interest on a qualified student loan during the year, you should receive Form 1098-E from the servicer.

Below that amount, no form is issued — but the interest is still deductible. This is where the deduction quietly goes unclaimed. Borrowers on low income-driven payments, or those who started repaying late in the year, often pay under $600, receive nothing in the post, and assume there is nothing to claim.

1. Log in to each servicer's site and find the interest paid for the year.
2. Add the figures if you have more than one servicer, or if your loans transferred mid-year.
3. Claim the total up to $2,500, whether or not a form arrived.

Loan transfers between servicers are a common cause of a missing or incomplete statement. Check both the old and new servicer for the same tax year.

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Who cannot claim it

• Anyone filing as married filing separately
• Anyone who can be claimed as a dependent on someone else's return
• Anyone whose modified adjusted gross income is above the ceiling for their filing status
• Anyone who is not legally obligated to repay the loan

That final condition catches parents who pay a child's loan that is in the child's name only. The person who owes the debt is the one who may claim the interest.

Frequently asked questions

How much can I deduct?

The lesser of $2,500 or the interest you actually paid during the year.

Do I need to itemise?

No. It is an adjustment to income, so you can claim it and still take the standard deduction.

What if I did not receive Form 1098-E?

Servicers issue it only when you paid $600 or more. Below that the interest is still deductible — get the figure from your servicer's website.

What are the 2026 income limits?

The deduction phases out between $85,000 and $100,000, or $175,000 and $205,000 filing jointly.

Can I deduct interest on a loan I pay for my child?

Only if you are legally obligated to repay it. Paying someone else's loan does not create the deduction for you.

Summary

Up to $2,500, no itemising required, phasing out from $85,000 or $175,000 depending on filing status.

The most common way it is lost is a borrower who paid under $600, received no Form 1098-E, and assumed there was nothing to claim. Check each servicer's site directly.