Form 1098-E reports student loan interest paid during the year. If you paid interest on a qualified student loan, you may claim a deduction of up to $2,500 on your tax return. This form comes directly from your lender and cannot be downloaded from the IRS website.
Who Qualifies for the Student Loan Interest Deduction?
You can claim the deduction if you meet all of these requirements:
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Your modified adjusted gross income (MAGI) is less than $75,000 (single) or $150,000 (married filing jointly).
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You do not file as married filing separately.
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You paid interest on a qualified student loan used for education.
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You are legally obligated to repay the loan.
What Doesn’t Qualify?
Some payments and loans are not eligible, such as:
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Refinanced loans used for non-educational purposes.
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Loan origination fees charged for lender services.
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Credit card debt not used exclusively for education.
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Employer repayment programs that reduce interest reporting.
Eligible Special Cases
The IRS allows deductions in certain situations:
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Consolidated loans still used for education.
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Refinanced student loans, if the proceeds cover education costs.
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Voluntary payments of interest on qualified loans.
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Credit card interest, but only when the charges were exclusively for tuition and educational expenses.
Why Form 1098-E Matters
Form 1098-E provides the information needed to claim the student loan interest deduction on your tax return. Enter the reported interest into your tax software to reduce taxable income and possibly lower your overall tax liability.
👉 Related: 1098-E Filing Software
👉 Related: IRS 1098-E Instructions