2025 Student Loan Interest Deduction
For 2025, the Student Loan Interest Deduction figures are $2,500 (Maximum deduction), $85,000 (Phase-out threshold, single filers), $170,000 (Phase-out threshold, joint filers) and 2 more figures below.
| Item | Single filers | Joint filers |
|---|---|---|
| Phase-out threshold | $85,000 | $170,000 |
| Fully phased out | $100,000 | $200,000 |
Effective 2025-01-01Source: Rev. Proc. 2024-40 (IRS)Verified 2026-09-02
Compared with 2024
| Item | 2024 | 2025 | Change |
|---|---|---|---|
| Maximum deduction | $2,500 | $2,500 | +$0 (+0.0%) |
| Phase-out threshold, single filers | $80,000 | $85,000 | +$5,000 (+6.3%) |
| Phase-out threshold, joint filers | $165,000 | $170,000 | +$5,000 (+3.0%) |
| Fully phased out, single filers | $95,000 | $100,000 | +$5,000 (+5.3%) |
| Fully phased out, joint filers | $195,000 | $200,000 | +$5,000 (+2.6%) |
Phase-out threshold
Fully phased out
$85,000$200,000
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
The deduction reaches a taxpayer who paid interest on a qualified education loan under § 221 during a taxable year beginning in 2025, and how much of the $2,500 survives depends on modified adjusted gross income. Rev. Proc. 2024-40 states one pair of income figures for returns generally and a second, higher pair in parentheses for joint returns; a taxpayer whose modified adjusted gross income reaches the upper figure for their return type is completely phased out and deducts nothing. The revenue procedure states the amounts only. What counts as a qualified education loan, who may claim the interest, and how the phase-out is computed between the two income points are all left to § 221 itself.
What changed this year, and why
For taxable years beginning in 2025, Rev. Proc. 2024-40 states the maximum deduction for interest paid on qualified education loans under § 221 as $2,500. The revenue procedure's inflation work in this item is on the income limits rather than on that ceiling: it sets, as adjusted for inflation, the modified adjusted gross income above which the $2,500 deduction begins to phase out under § 221(b), and the higher modified adjusted gross income at which it is completely phased out, with a separate and larger pair of figures for joint returns. The item is one of the inflation-adjusted items generally determined by reference to § 1(f), stated for Code provisions as in effect on October 22, 2024.
Common questions
- What is the maximum student loan interest deduction for 2025?
- $2,500. Rev. Proc. 2024-40 describes it as the maximum deduction for interest paid on qualified education loans under § 221 for taxable years beginning in 2025. That figure is the ceiling before any income phase-out is applied, so a taxpayer above the relevant modified adjusted gross income limits deducts less than $2,500, or nothing at all.
- At what income does the student loan interest deduction phase out in 2025?
- Rev. Proc. 2024-40 gives two income points. The $2,500 maximum begins to phase out under § 221(b) for taxpayers with modified adjusted gross income above a stated figure, and it is completely phased out for taxpayers whose modified adjusted gross income reaches a second, higher figure. Both points are stated as adjusted for inflation for taxable years beginning in 2025, and both are higher for a joint return.
- Can married couples filing jointly deduct more than $2,500?
- No. Rev. Proc. 2024-40 states one maximum deduction for interest paid on qualified education loans, $2,500, and it does not state a doubled figure for a joint return. What changes on a joint return is the income test: the procedure gives higher modified adjusted gross income figures, in parentheses, for both the start and the end of the phase-out. The ceiling on the deduction itself stays the same.
- Are there separate phase-out figures for head of household or single filers?
- Rev. Proc. 2024-40 states one pair of modified adjusted gross income figures that applies generally, with a second pair in parentheses for joint returns. It does not break the income limits out by any other filing status, so a single filer and a head of household read the same general figures. The revenue procedure also states no separate ceiling for either; the $2,500 maximum is common to all of them.
- Is the $2,500 student loan interest cap adjusted for inflation?
- Rev. Proc. 2024-40 restates $2,500 as the maximum deduction and attaches the words as adjusted for inflation to the phase-out under § 221(b) rather than to the ceiling. In this item the indexing therefore works on the modified adjusted gross income limits, moving who can claim the deduction, while the maximum amount itself is stated at $2,500 for taxable years beginning in 2025.
- What loans does the student loan interest deduction cover?
- The revenue procedure describes the deduction as covering interest paid on qualified education loans under § 221. It does not define what makes a loan a qualified education loan, does not list eligible institutions, and does not address who between a borrower and a co-signer may claim the interest. Those conditions are in § 221 itself; Rev. Proc. 2024-40 supplies only the $2,500 maximum and the income limits.
- Which tax year does the $2,500 deduction apply to?
- Rev. Proc. 2024-40 states the interest on education loans item for taxable years beginning in 2025, and the general rule in the procedure's effective date section applies the revenue procedure to taxable years beginning in 2025. This item is not one of those routed to the calendar year rule instead, so the figures follow the taxpayer's taxable year rather than the calendar year in which interest was paid.
- Where does the $2,500 student loan interest deduction come from?
- It is the maximum deduction under § 221 of the Internal Revenue Code. Rev. Proc. 2024-40 restates it, and publishes the inflation-adjusted phase-out limits that go with it, in its interest on education loans item. The procedure says the inflation-adjusted items it sets out are generally determined by reference to § 1(f), so the income limits track the statutory indexing rule rather than an annual discretionary choice.
Every amount on this page is a published figure rather than yours. The Student loan interest deduction for a single filer takes the number you enter and works it out against them, showing which published figure it used.
How the deduction is reduced inside the phase-out range
If your modified adjusted gross income falls inside the phase-out range, the deduction is cut by a fraction rather than lost all at once. You start with the interest you actually paid, limited to $2,500, and multiply it by a fraction. The top of the fraction is your income above the threshold - $85,000 for single filers or $170,000 for joint filers. The bottom of the fraction is $15,000 for single filers or $30,000 for joint filers. That product is the amount your deduction is reduced by. You then subtract that reduction from your original deduction to arrive at the amount you may actually claim. Someone at the bottom of the range loses only a small portion, while someone near the top of the range loses nearly all of it. Once income reaches $100,000 for single or $200,000 for joint, the fraction equals one and the entire deduction is gone.
To figure the phaseout, multiply your in- terest deduction (before the phaseout but not more than $2,500) by a fraction. The numerator (top part) is your MAGI minus $85,000 ($170,000 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 (2025), Tax Benefits for Education (IRS)
The income the phase-out is measured on
The income used to measure whether the student loan interest deduction is phased out is called modified adjusted gross income (MAGI). For most taxpayers, MAGI is simply adjusted gross income (AGI) as shown on their federal income tax return, calculated before subtracting any deduction for student loan interest. This means the student loan interest deduction itself is added back when figuring MAGI for purposes of the phase-out. There are other modifications that may apply in certain situations, such as for taxpayers filing Form 1040-NR or those with excluded income from Puerto Rico. The phase-out begins when MAGI exceeds $85,000 for single filers or $170,000 for joint filers, and the deduction is completely eliminated once MAGI reaches $100,000 for single filers or $200,000 for joint filers.
MAGI is AGI as figured on their federal income tax return before subtracting any deduction for student loan interest.
Publication 970 (2025), Tax Benefits for Education (IRS)
Who can claim the deduction
A taxpayer may claim the student loan interest deduction only if four conditions are all satisfied. First, the taxpayer's filing status must be any status except married filing separately. This means single filers, heads of household, qualifying surviving spouses, and married couples filing jointly are eligible, but married individuals filing separately are not. Second, no other taxpayer may claim the taxpayer as a dependent on their return. If another person lists the taxpayer as a dependent, neither the taxpayer nor that other person may deduct the student loan interest. Third, the taxpayer must be legally obligated to pay interest on a qualified student loan. Fourth, the taxpayer must have actually paid interest on that qualified student loan during the tax year. All four requirements must be met; failing any one of them disqualifies the deduction entirely. The maximum deduction is $2,500, subject to phase-out based on modified adjusted gross income.
Can You Claim the Deduction? 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 you as a dependent on their tax return. • You are legally obligated to pay interest on a qualified student loan. • You paid interest on a qualified student loan.
Publication 970 (2025), Tax Benefits for Education (IRS)
Payments that do not count as student loan interest
Not every payment made toward a student loan counts as deductible interest. Three categories of payments are specifically excluded. First, interest paid on a loan does not qualify if the borrower is not legally obligated under the loan terms to make interest payments. Second, loan origination fees that are charges for property or services provided by the lender, such as commitment fees or processing costs, do not count as interest. Only origination fees that are charged for the use of money can be treated as deductible interest. Third, interest paid on a loan to the extent payments were made through participation in the National Health Service Corps Loan Repayment Program or certain other loan repayment assistance programs described in chapter 5 is excluded. A taxpayer who benefits from one of these programs cannot also claim a deduction for the same interest. These exclusions apply regardless of filing status or income level.
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 (2025), Tax Benefits for Education (IRS)
You can keep deducting interest for as long as the loan lasts
For the 2025 tax year, the IRS allows you to deduct interest paid on a qualified student loan for as long as that loan remains outstanding. This means there is no time limit on how many years you can claim the deduction - you can continue deducting eligible interest payments until the loan balance reaches zero. The deduction applies to both required monthly payments and any voluntary payments you make toward the loan. As long as you meet the other eligibility requirements, including having modified adjusted gross income below the phase-out thresholds of $85,000 for single filers or $170,000 for joint filers, you can claim the student loan interest deduction each year you pay interest, regardless of how long it takes to fully repay the loan.
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 (2025), Tax Benefits for Education (IRS)
Where the deduction actually lands on your return
The student loan interest deduction is treated as an adjustment to income on a federal tax return, which means it reduces adjusted gross income directly rather than requiring the taxpayer to itemize deductions. For 2025, the IRS instructs taxpayers to claim this deduction by entering the allowable amount on Schedule 1 (Form 1040), line 21. Because it is an above-the-line adjustment, the deduction is available even to taxpayers who take the standard deduction. The maximum amount that can be claimed is $2,500, though the actual deduction may be reduced based on the taxpayer's modified adjusted gross income. For single filers, the phase-out begins at $85,000 and the deduction is fully eliminated at $100,000. For those filing jointly, the phase-out range is $170,000 to $200,000. Taxpayers must calculate their allowable deduction using the appropriate worksheet before entering the final figure on Schedule 1.
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 21.
Publication 970 (2025), Tax Benefits for Education (IRS)
The same interest cannot be deducted twice under two different provisions
Federal tax rules prevent taxpayers from receiving a double benefit by claiming the same interest payment under more than one provision of the tax code. The IRS explicitly states that a borrower cannot deduct as interest on a student loan any amount that qualifies as an allowable deduction under another provision of tax law, such as home mortgage interest. This means if interest on a loan could potentially be classified under multiple categories, the taxpayer must choose only one deduction and cannot split or duplicate the claim. For 2025, the student loan interest deduction allows up to $2,500 in qualified interest to be deducted, subject to income limits. For single filers, the deduction phases out between $85,000 and $100,000 of modified adjusted gross income. For joint filers, the phase-out range is $170,000 to $200,000. The no-double-benefit rule ensures that each dollar of interest is deducted only once, maintaining the integrity of the tax system.
No Double Benefit Allowed 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 (2025), Tax Benefits for Education (IRS)
Refinancing for more than the original balance can disqualify all the interest
When a borrower refinances a qualified student loan for an amount greater than the original loan balance, special rules apply that can affect the deductibility of all interest on the new loan. The IRS states that if additional funds from the refinancing are used for any purpose other than qualified education expenses, the borrower cannot deduct any interest paid on the refinanced loan. This is a strict rule that disqualifies the entire loan from the deduction, not just the portion used for non-educational purposes. For 2025, the student loan interest deduction allows up to $2,500 in qualified interest to be claimed, subject to income phase-outs. Single filers see the deduction reduce between $85,000 and $100,000 of modified adjusted gross income, while joint filers face phase-out between $170,000 and $200,000. Borrowers considering refinancing should carefully track how the proceeds are used, as mixing educational and non-educational expenses can result in the complete loss of the interest 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 (2025), 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. 2024-40 (IRS)
- Maximum deduction
For taxable years beginning in 2025, the $2,500 maximum deduction for interest paid on qualified education loans under § 221 begins to phase out
- Phase-out threshold, single filers
begins to phase out under § 221(b)(2)(B), as adjusted for inflation, for taxpayers with modified adjusted gross income in excess of $85,000
- Phase-out threshold, joint filers
for taxpayers with modified adjusted gross income in excess of $85,000 ($170,000 for joint returns)
- Fully phased out, single filers
is completely phased out for taxpayers with modified adjusted gross income of $100,000 or more
- Fully phased out, joint filers
phased out for taxpayers with modified adjusted gross income of $100,000 or more ($200,000 or more for joint returns)