For tax year 2026 you can deduct the lesser of $2,500 or the student loan interest you actually paid. The deduction starts shrinking when modified AGI exceeds $85,000 (single, head of household) or $175,000 (married filing jointly) and disappears at $100,000 and $205,000. It is an above-the-line adjustment, so you don’t need to itemize, but married couples filing separately can’t claim it.
Who can claim the student loan interest deduction
- You paid interest on a qualified student loan (federal or private) taken out for yourself, your spouse or a dependent, for qualified education expenses.
- You are legally obligated to pay the loan (a parent paying a child’s loan in the child’s name can’t deduct it).
- Your filing status is not married filing separately.
- Nobody can claim you as a dependent.
- Your MAGI is under the phase-out ceiling.
Servicers send Form 1098-E if you paid $600 or more of interest; if you paid less, you can still deduct it using your own records or the servicer’s online statement.
2026 phase-out: how much can you deduct?
Inside the phase-out range, the deduction is reduced in proportion to how far your MAGI is into the range. Values assume you paid at least $2,500 of interest; tax savings use the 22% (single) and 24% (joint) federal brackets as examples.
| MAGI (single) | Share allowed | Deduction | Tax saved at 22% |
|---|---|---|---|
| $80,000 | 100% | $2,500 | $550 |
| $85,000 | 100% | $2,500 | $550 |
| $88,000 | 80% | $2,000 | $440 |
| $90,000 | 67% | $1,667 | $367 |
| $92,500 | 50% | $1,250 | $275 |
| $95,000 | 33% | $833 | $183 |
| $98,000 | 13% | $333 | $73 |
| $100,000 | 0% | $0 | $0 |
| MAGI (joint) | Share allowed | Deduction | Tax saved at 24% |
|---|---|---|---|
| $170,000 | 100% | $2,500 | $600 |
| $175,000 | 100% | $2,500 | $600 |
| $180,000 | 83% | $2,083 | $500 |
| $190,000 | 50% | $1,250 | $300 |
| $195,000 | 33% | $833 | $200 |
| $200,000 | 17% | $417 | $100 |
| $205,000 | 0% | $0 | $0 |
How much interest will you pay in year one?
Whether you hit the $2,500 cap depends on the balance and rate. First-year interest on the 10-year standard plan at 2026-27 rates:
| Balance | Year-1 interest | Deductible (if under phase-out) |
|---|---|---|
| $20,000 at 6.52% | $1,261 | $1,261 |
| $50,000 at 8.07% | $3,911 | $2,500 |
| $100,000 at 8.07% | $7,823 | $2,500 |
On RAP, the deduction applies to interest you actually pay; interest that RAP waives was never paid, so it isn’t deductible.
Ways to keep the deduction
- Lower MAGI with pre-tax 401(k), 403(b) or HSA contributions — they reduce AGI before the phase-out test.
- Pay interest that accrued during school or grace once repayment starts; it counts in the year you pay it.
- Check whether filing jointly vs separately changes your RAP or IBR payment more than the deduction is worth.
See your 2026 take-home payOur paycheck calculator shows federal, state and FICA withholding so you can budget the loan payment.
Frequently asked questions
What is the student loan interest deduction limit for 2026?
You can deduct up to $2,500 of interest paid during the year, or the actual interest paid if less.
What is the income limit for the student loan interest deduction in 2026?
The deduction phases out between $85,000 and $100,000 of modified AGI for single and head-of-household filers, and between $175,000 and $205,000 for married couples filing jointly.
Do I need to itemize to deduct student loan interest?
No. It is an adjustment to income, so you can claim it with the standard deduction.
Can I deduct student loan interest if married filing separately?
No. Married taxpayers who file separately cannot claim the student loan interest deduction.
Can parents deduct student loan interest they pay for a child?
Only if the parent is legally obligated on the loan, such as a Parent PLUS loan, and otherwise qualifies.
Related student loan guides
- How student loan interest worksDaily accrual, subsidized vs unsubsidized
- Pay off or invest?Rate vs return, the 401(k) match
- Is forgiveness taxable?The 2026 IDR tax bomb
- 2026-27 interest rates6.52% / 8.07% / 9.07%
- Refinance student loans?Savings vs federal protections
- RAP explainedPayment chart, $50 match, 30-year forgiveness
- Monthly payment on $20,000 in student loansEvery plan, 2026-27 rates
- Monthly payment on $40,000 in student loansEvery plan, 2026-27 rates
- Monthly payment on $100,000 in student loansEvery plan, 2026-27 rates
Payments by balance
Sources & methodology
- IRS Tax Topic 456, Student loan interest deduction (reviewed Sep 24, 2026); 2026 phase-out ranges from IRS Rev. Proc. 2025-32 as summarized by tax guides (Sep 2026).
- Payments use standard amortization with monthly interest. RAP and IBR projections are our simplified models (income +3%/yr, single loan, on-time payments) — your servicer’s figures will differ. Information only, not financial, tax or legal advice. Rules checked 2026-11-03.