2025 Student Loan Interest Deduction

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.