2018 Student Loan Interest Deduction
For 2018, the Student Loan Interest Deduction figures are $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 2018-01-01Source: Rev. Proc. 2017-58 (IRS)Verified 2026-09-02
Compared with 2017
Every figure on this page is unchanged from 2017.
| Item | 2017 | 2018 | 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 | $135,000 | $135,000 | +$0 (+0.0%) |
| Fully phased out, single filers | $80,000 | $80,000 | +$0 (+0.0%) |
| Fully phased out, joint filers | $165,000 | $165,000 | +$0 (+0.0%) |
Phase-out threshold
Fully phased out
$65,000$165,000
One dot per column of the table, on a scale running from the smallest of these amounts to the largest. The scale is logarithmic - each faint line is ten times the one before it, so that the amounts crowded at the low end stay far enough apart to read. The table states which dot is which.
Who it applies to
Taxpayers who paid interest on qualified education loans and claim the student loan interest deduction on their federal income tax return for 2018
What changed this year, and why
For 2018, 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 is fully eliminated at $80,000. For married couples filing jointly, the phase-out begins at $135,000 and is complete at $165,000.
Common questions
- How does the income phase-out work for the student loan interest deduction?
- In 2018, the student loan interest deduction phases out for single filers with modified adjusted gross income over $65,000 and is fully eliminated at $80,000. For joint filers, the phase-out begins at $135,000 and is complete at $165,000.
How the deduction is reduced inside the phase-out range
When a taxpayer's modified adjusted gross income falls within the phase-out range, the student loan interest deduction is reduced using a formula. The reduction amount is calculated by multiplying the interest deduction (before the phase-out, but not more than $2,500) by a fraction. The numerator of the fraction is the taxpayer's MAGI minus $65,000 for single filers, or $135,000 for joint filers. The denominator is $15,000 for single filers or $30,000 for joint filers. The result of this multiplication is then subtracted from the pre-phase-out deduction to determine the final allowable amount. Once MAGI reaches the upper limit of the phase-out range ($80,000 for single filers or $165,000 for joint filers), the deduction is reduced to zero. The formula ensures that taxpayers with income in the phase-out range receive a partial deduction that decreases proportionally as their income rises through the range.
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 (2018), Tax Benefits for Education (IRS)
The income the phase-out is measured on
To determine whether the student loan interest deduction is available, the IRS looks at your modified adjusted gross income (MAGI). For most taxpayers, MAGI is the adjusted gross income as figured on their federal income tax return before subtracting any deduction for student loan interest. This means you start with the AGI shown on your return and do not reduce it by the student loan interest deduction itself. The deduction phases out gradually once MAGI exceeds certain thresholds. For 2018, the phase-out begins at $65,000 for single filers and $135,000 for joint filers. The deduction is completely eliminated once MAGI reaches $80,000 for single filers or $165,000 for joint filers. Because MAGI is measured before subtracting the student loan interest deduction, the calculation uses your income without the benefit of the deduction you are trying to claim. This ensures the phase-out is based on your true income level rather than a reduced figure that already reflects the deduction.
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 (2018), Tax Benefits for Education (IRS)
Who can claim the deduction
The student loan interest deduction is available to taxpayers who meet specific requirements. You can claim the deduction if all of the following conditions are satisfied: your filing status is any status except married filing separately; no one else is claiming you as a dependent on their tax return; you are legally obligated to pay interest on a qualified student loan; and you actually paid interest on a qualified student loan during the tax year. The filing status requirement means that married taxpayers who file separate returns cannot claim this deduction, regardless of their income level or the amount of interest paid. The dependent requirement prevents taxpayers who can be claimed as dependents by another person (such as a parent claiming a child) from taking the deduction themselves. Both the legal obligation and actual payment requirements ensure that only those who are responsible for and have made payments on qualified education loans can benefit from the deduction.
Generally, you can claim the deduction if all of the follow- ing requirements are met.
Publication 970 (2018), Tax Benefits for Education (IRS)
Payments that do not count as student loan interest
Certain payments cannot be claimed as student loan interest for tax purposes. You cannot deduct interest paid on a loan if you are not legally obligated to make interest payments under the loan terms. Loan origination fees that represent payments for property or services provided by the lender, such as commitment fees or processing costs, also do not qualify as deductible interest. Additionally, interest paid on a loan is not deductible to the extent that payments were made through participation in the National Health Service Corps Loan Repayment Program or certain other loan repayment assistance programs. These exclusions ensure that only genuine interest expenses on qualified student loans, where the taxpayer has a legal obligation to pay and has actually made payments from their own funds, qualify for the deduction.
You can't claim a student loan interest deduction for any of the following items.
Publication 970 (2018), Tax Benefits for Education (IRS)
You can keep deducting interest for as long as the loan lasts
For the 2018 tax year, the IRS allows you to deduct interest on a qualified student loan for as long as the loan remains outstanding. There is no time limit on how many years you can claim the deduction; each year you make a payment that includes interest, that interest is potentially deductible up to the $2,500 maximum, provided you meet the other eligibility requirements. This means that borrowers with long repayment periods can continue to benefit from the deduction annually until the principal balance reaches zero. The deduction phases out once modified adjusted gross income exceeds $65,000 for single filers or $135,000 for joint filers, and it is fully phased out at $80,000 (single) or $165,000 (joint), but the duration of the deduction itself is tied only to whether the loan still exists and interest is still being paid.
You can deduct all interest you paid during the year on your student loan, including voluntary payments, until the loan is paid off.
Publication 970 (2018), Tax Benefits for Education (IRS)
Where the deduction actually lands on your return
The student loan interest deduction reduces your adjusted gross income directly rather than requiring you to itemize deductions. Because it is classified as an adjustment to income, you can claim it whether or not you take the standard deduction. For the 2018 tax year, the IRS instructs taxpayers to enter the allowable deduction amount on Schedule 1 (Form 1040), line 33. This placement on Schedule 1 means the deduction flows through to your Form 1040 and reduces your total income before other calculations. The maximum amount you can deduct is $2,500 per year, though this phases out for single filers with modified adjusted gross income between $65,000 and $80,000, and for joint filers with income between $135,000 and $165,000. As long as you meet the eligibility requirements and the loan remains outstanding, you can claim this above-the-line adjustment each year.
The student loan interest deduction is an adjustment to in- come. To claim the deduction, enter the allowable amount on Schedule 1 (Form 1040), line 33; Form 1040NR, line 33; or Form 1040NR-EZ, line 9.
Publication 970 (2018), Tax Benefits for Education (IRS)
The same interest cannot be deducted twice under two different provisions
For the 2018 student loan interest deduction, the IRS prohibits a double tax benefit: the same interest expense cannot be claimed under more than one provision of the Internal Revenue Code. If interest paid on a loan is already deductible elsewhere - for example, as home mortgage interest - that same interest cannot be counted toward the student loan interest deduction. Taxpayers who make payments on a qualified student loan may take the deduction (up to the $2,500 maximum, subject to the MAGI phase-out of $65,000–$80,000 for single filers or $135,000–$165,000 for joint filers), but only for amounts that are not otherwise deductible. The rule ensures that a single dollar of interest yields only one tax benefit, even if the loan could arguably fit under a different deduction provision.
You can't deduct as interest on a student loan any amount that is an allowable deduction under any other provision of the tax law (for example, home mortgage interest).
Publication 970 (2018), Tax Benefits for Education (IRS)
Refinancing for more than the original balance can disqualify all the interest
The IRS rules for the 2018 student loan interest deduction impose a severe consequence when a borrower refinances for more than the original loan balance and uses the excess proceeds for non-educational purposes. In that situation, you can't deduct any interest paid on the refinanced loan. The disqualification applies to the entire refinanced loan, not just the portion of interest attributable to the cash-out amount. This means that even if most of the refinanced balance still relates to qualified education expenses, taking extra funds for a car, home improvement, or any other non-educational use eliminates the deduction on the whole loan. The maximum deduction that could otherwise have been claimed is $2,500 per year, subject to the phase-out that begins at $65,000 of modified adjusted gross income for single filers and $135,000 for joint filers, with full phase-out at $80,000 (single) and $165,000 (joint). Borrowers who refinance should ensure that any additional borrowing above the original student loan balance is used solely for qualified education expenses to preserve the deduction.
If you refinance a qualified student loan for more than your original loan and you use the additional amount for any purpose other than qualified edu- cation expenses, you can't deduct any interest paid on the refinanced loan.
Publication 970 (2018), 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. 2017-58 (IRS)
- Maximum deduction
For taxable years beginning in 2018, 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).