- Is student loan interest tax deductible?
- How the student loan interest deduction works
- How to qualify for the student loan interest deduction
- Which student loans are eligible for the student loan interest deduction?
- Who doesn’t qualify for the student loan interest deduction?
- Can I deduct student loan payments?
Compare Our Top Picks For Student Loan Refinance For 2021
Overview
Key | Value |
---|---|
Variable APR: | 2.25% – 6.49% |
Fixed APR: | 2.99% – 6.94% |
Minimum Credit Score: | 650 |
Minimum Income: | None |
Fees: | None |
Minimum Loan Amount: | $5,000 ($10,000 in CA) |
Details
Key | Value |
---|---|
Eligible Loans: | Private & Federal |
Eligible Degrees: | Undergraduate & Graduate |
Loan Terms: | 5, 7, 10, 15, 20 years |
Borrower Residency: | All states |
Hardship Deferment: | Yes |
Co-signer Option: | Yes |
Overview
Key | Value |
---|---|
Variable APR: | 1.99% – 5.74% |
Fixed APR: | 2.98% – 5.89% |
Minimum Credit Score: | 650 |
Minimum Income: | None |
Fees: | None |
Minimum Loan Amount: | $5,000 |
Details
Key | Value |
---|---|
Eligible Loans: | Private & Federal |
Eligible Degrees: | Undergraduate & Graduate |
Loan Terms: | 5-20 years |
Borrower Residency: | All States except KY or NV |
Hardship Deferment: | Yes |
Co-signer Option: | No |
Overview
Key | Value |
---|---|
Variable APR: | 2.39% – 6.01% |
Fixed APR: | 2.79% – 5.99% |
Minimum Credit Score: | 680 |
Minimum Income: | $35,000 |
Fees: | None |
Minimum Loan Amount: | $15,000 |
Details
Key | Value |
---|---|
Eligible Loans: | Private & Federal |
Eligible Degrees: | Undergraduate & Graduate |
Loan Terms: | 5, 7, 10, 15, 20 years |
Borrower Residency: | All States |
Hardship Deferment: | Yes |
Co-signer Option: | Yes |
Overview
Key | Value |
---|---|
Variable APR: | 1.89% – 5.99% |
Fixed APR: | 2.63% – 6.25% |
Minimum Credit Score: | 660 |
Minimum Income: | None |
Fees: | None |
Minimum Loan Amount: | $5,000 |
Details
Key | Value |
---|---|
Eligible Loans: | Private & Federal |
Eligible Degrees: | Undergraduate & Graduate |
Loan Terms: | 5 – 20 years |
Borrower Residency: | All states |
Hardship Deferment: | Varies |
Co-signer Option: | Yes |
Overview
Key | Value |
---|---|
Variable APR: | 1.89% – 5.90% |
Fixed APR: | 2.80% – 6.00% |
Minimum Credit Score: | 700 |
Minimum Income: | None |
Fees: | None |
Minimum Loan Amount: | $5,000 |
Details
Key | Value |
---|---|
Eligible Loans: | Private & Federal |
Eligible Degrees: | Undergraduate & Graduate |
Loan Terms: | 5, 7, 10, 15, 20 years |
Borrower Residency: | All States |
Hardship Deferment: | Yes |
Co-signer Option: | Yes |
Overview
Key | Value |
---|---|
Overall Rate: | 1.95% – 3.85% |
Variable APR: | – |
Fixed APR: | 1.95% – 3.85% |
Minimum Credit Score: | None |
Minimum Income: | None |
Fees: | None |
Minimum Loan Amount: | $25,000 |
Details
Key | Value |
---|---|
Eligible Loans: | Private & Federal |
Eligible Degrees: | Undergraduate & Graduate |
Loan Terms: | 5, 7, 10, 15 years |
Borrower Residency: | Must live near a branch in California; New York City; Boston; Greenwich, Connecticut; Palm Beach, Florida; Portland, Oregon; or Jackson, Wyoming |
Hardship Deferment: | No |
Co-signer Option: | Yes |
Overview
Key | Value |
---|---|
Variable APR: | 1.90% – 5.25% |
Fixed APR: | 2.95% – 7.63% |
Minimum Credit Score: | 680 |
Minimum Income: | $24,000 |
Fees: | None |
Minimum Loan Amount: | $5,000 |
Details
Key | Value |
---|---|
Eligible Loans: | Private & Federal |
Eligible Degrees: | Undergraduate & Graduate |
Loan Terms: | 5, 7, 10, 15, 20 years |
Borrower Residency: | All states, except ME, ND, NV, RI, WV |
Hardship Deferment: | Yes |
Co-signer Option: | Yes |
1. Is student loan interest tax deductible?
Yes, student loan interest is tax deductible on your federal income tax returns up to $2,500 of student loan interest each tax year. It’s important to note that in 2020, federal student loan interest was temporarily suspended due to the Cares Act (the financial stimulus package). This may impact your ability to deduct interest on your 2020 income taxes, since you may not have paid less student loan interest due to the Cares Act.
If you are like many student loan borrowers, then your goal is likely to pay off student loans faster. The sooner you pay off student loans, the less student loan interest you will have. If you have a choice to pay off student loans or take a higher student loan interest deduction, you can likely save more money by getting a lower interest rate or paying off your student loans.
2. How student loan interest deduction works
How to deduct student loan interest
Student loan interest deduction form
- $600 or more of student loan interest: Use Form 1098-E, which you will automatically receive if you paid more than $600 of student loan interest in a calendar year.
- Less than $600 of student loan interest: If you paid less than $600 of student loan interest in a given calendar year, ask your student loan servicer for a student loan interest deduction form.
3. How to qualify for the student loan interest deduction
- You must have modified adjusted gross income (MAGI) of less than $70,000 if you are individual taxpayer.
- You can receive a lower student loan interest deduction if your MAGI is greater than $70,000 but less than $85,000.
- The maximum student loan interest deduction you can receive is $2,500.
4. Which student loans are eligible for the student loan interest deduction?
- Student loans you borrowed: If you borrowed student loans for your own education, you can deduct student loan interest whether you are a current student or are no longer in school.
- Student loans you borrowed for someone else: You can get the student loan interest deduction if you borrowed student loans for someone else. For example, if you borrowed a Parent PLUS Loan or your dependent child, you could qualify for the student loan interest deduction (assuming you meet other requirements).
5. Who doesn’t qualify for the student loan interest tax deduction?
- You earn more than $85,000 per year as an individual tax filer.
- You can be claimed as a dependent on someone else’s income tax return if you file as a single taxpayer.
- You or your spouse cannot be claimed on anyone else’s tax return if you file as married filing jointly.
- You are married and file your income taxes as married filing separately.
- You paid no student loan interest in a given tax year.
6. Can I deduct student loan payments?
When it comes to student loan repayment, many borrowers wonder whether they can deduct student loan payments. There are many ways to pay off student loans, ranging from student loan refinancing to making an extra student loan payment.
When you pay off student loans, you pay your principal balance (the amount you originally borrowed) plus any interest. While you can deduct interest payments on your federal income taxes, you cannot deduct student loan payments such as paying off your principal student loan balance.