2017 Student Loan Interest Deduction
For 2017, the Student Loan Interest Deduction is $2,500 (Maximum deduction), $65,000 (Phase-out threshold, single filers), $135,000 (Phase-out threshold, joint filers) and 2 more figures below.
| Item | Single filers | Joint filers |
|---|---|---|
| Phase-out threshold | $65,000 | $135,000 |
| Fully phased out | $80,000 | $165,000 |
Effective 2017-01-01Source: Rev. Proc. 2016-55 (IRS)Verified 2026-08-29
Compared with 2016
| Item | 2016 | 2017 | Change |
|---|---|---|---|
| Maximum deduction | $2,500 | $2,500 | +$0 (+0.0%) |
| Phase-out threshold, single filers | $65,000 | $65,000 | +$0 (+0.0%) |
| Phase-out threshold, joint filers | $130,000 | $135,000 | +$5,000 (+3.8%) |
| Fully phased out, single filers | $80,000 | $80,000 | +$0 (+0.0%) |
| Fully phased out, joint filers | $160,000 | $165,000 | +$5,000 (+3.1%) |
Who it applies to
Taxpayers who paid interest on qualified education loans and claim the deduction under IRC Section 221
What changed this year, and why
For 2017, the maximum student loan interest deduction is $2,500. The deduction phases out for single filers with modified adjusted gross income above $65,000 and for joint filers above $135,000. It is fully phased out at $80,000 for single filers and $165,000 for joint filers.
Common questions
- What is the student loan interest deduction?
- Up to $2,500 in interest paid on qualified education loans may be deducted, subject to income-based phase-outs.
- When does the deduction phase out based on income?
- The deduction begins to phase out for single filers with modified adjusted gross income over $65,000 and for joint filers over $135,000. It is fully phased out for single filers at $80,000 or more and for joint filers at $165,000 or more.
How the deduction is reduced inside the phase-out range
When your modified adjusted gross income falls inside the phase-out range, the IRS reduces your student loan interest deduction using a fraction. You start with the interest you actually paid (or the maximum deduction, whichever is lower). The fraction's numerator is your MAGI minus the phase-out threshold for your filing status; the denominator is the width of the phase-out range. The result of multiplying the deduction by that fraction is the amount that is phased out. You subtract that reduction from your deduction to arrive at the amount you may claim on your return. Single filers see the range begin at $65,000 and span $15,000; married couples filing jointly see the range begin at $135,000 and span $30,000. Once MAGI reaches the top of the range, the deduction is zero.
To figure the phaseout, multiply your interest deduction (before the phaseout, but not more than $2,500) by a fraction. The numerator (top part) is your MAGI minus $65,000 ($135,000 in the case of a joint re- turn). The denominator (bottom part) is $15,000 ($30,000 in the case of a joint return). Subtract the result from your deduction (before the phaseout) to give you the amount you can deduct.
Publication 970 (2017), Tax Benefits for Education (IRS)
The income the phase-out is measured on
The income used to decide whether your student loan interest deduction is phased out is called modified adjusted gross income, or MAGI. For most taxpayers, MAGI is simply the adjusted gross income shown on the federal income tax return, computed before subtracting any deduction for student loan interest. In other words, you do not reduce your AGI by the student loan interest you paid when you are measuring whether you are inside the phase-out range. The phase-out range begins at $65,000 for single filers and $135,000 for married couples filing jointly, and it is fully phased out at $80,000 for single filers and $165,000 for joint filers. Because the deduction itself is an above-the-line adjustment, adding it back for this measurement keeps the income figure consistent for every taxpayer being tested.
For most taxpayers, MAGI is the adjus- ted gross income as figured on their federal income tax re- turn before subtracting any deduction for student loan in- terest.
Publication 970 (2017), Tax Benefits for Education (IRS)
Who can claim the deduction
You may claim the student loan interest deduction only if every one of a short list of requirements is satisfied. Your filing status must not be married filing separately; single, head of household, qualifying widow(er), and married filing jointly are all acceptable. In addition, no other taxpayer may claim a personal exemption for you on his or her return. You must also be legally obligated to pay interest on a qualified student loan and must have actually paid such interest during the year. The deduction is taken as an adjustment to income, so you can claim it even if you do not itemize deductions on Schedule A. If any one of these conditions is not met, you are not eligible to claim the deduction, even if you paid substantial interest on an education loan.
Generally, you can claim the deduction if all of the follow- ing requirements are met. Your filing status is any filing status except married fil- ing separately. No one else is claiming an exemption for you on his or her tax return. You are legally obligated to pay interest on a qualified student loan. You paid interest on a qualified student loan.
Publication 970 (2017), Tax Benefits for Education (IRS)
Payments that do not count as student loan interest
Not every payment you make on a student loan counts as deductible interest. The IRS specifically lists three categories of payments that cannot be included. First, interest paid on a loan for which you are not legally obligated to make interest payments does not qualify. Second, loan origination fees that are really payments for property or services provided by the lender, such as commitment fees or processing costs, are not treated as interest. Third, interest paid on a loan to the extent that the payments are made through your participation in the National Health Service Corps Loan Repayment Program, or certain other loan repayment assistance programs, is excluded. Before claiming a deduction, a taxpayer should verify that each payment they wish to include falls outside these exclusions.
Don't Include as Interest You can't claim a student loan interest deduction for any of the following items. Interest you paid on a loan if, under the terms of the loan, you aren't legally obligated to make interest pay- ments. Loan origination fees that are payments for property or services provided by the lender, such as commitment fees or processing costs. Interest you paid on a loan to the extent payments were made through your participation in the National Health Service Corps Loan Repayment Program (the “NHSC Loan Repayment Program”) or certain other loan repayment assistance programs.
Publication 970 (2017), Tax Benefits for Education (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Rev. Proc. 2016-55 (IRS)
- Maximum deduction
For taxable years beginning in 2017, the $2,500 maximum deduction for interest paid on qualified education loans under § 221 begins to phase out
- Phase-out threshold, single filers
phase out under § 221(b)(2)(B) for taxpayers with modified adjusted gross income in excess of $65,000
- Phase-out threshold, joint filers
for taxpayers with modified adjusted gross income in excess of $65,000 ($135,000 for joint returns)
- Fully phased out, single filers
is completely phased out for taxpayers with modified adjusted gross income of $80,000 or more ($165,000 or more for joint returns).
- Fully phased out, joint filers
is completely phased out for taxpayers with modified adjusted gross income of $80,000 or more ($165,000 or more for joint returns).