Student Loan Interest Deduction

You can take this deduction only if all of the following apply.

  • You paid interest in 2008 on a qualified student loan (see below).
  • Your filing status is any status except married filing separately.
  • Your modified adjusted gross income (AGI) is less than: $70,000 if single, head of household, or qualifying widow(er); $145,000 if married filing jointly. Use lines 2 through 4 of the worksheet below to figure your modified AGI.
  • You, or your spouse if filing jointly, are not claimed as a dependent on someone’s (such as your parent’s) 2008 tax return.

Qualified student loan. A qualified student loan is any loan you took out to pay the qualified higher education expenses for any of the following individuals.

  1. Yourself or your spouse.
  2. Any person who was your dependent when the loan was taken out.
  3. Any person you could have claimed as a dependent for the year the loan was taken out except that:
    1. The person filed a joint return,
    2. The person had gross income that was equal to or more than the exemption amount for that year ($3,500 for 2008), or
    3. You, or your spouse if filing jointly, could be claimed as a dependent on someone else’s return.

Qualified higher education expenses. Qualified higher education expenses generally include tuition, fees, room and board, and related expenses such as books and supplies. The expenses must be for education in a degree, certificate, or similar program at an eligible educational institution. An eligible educational institution includes most colleges, universities, and certain vocational schools.

Eligible student. The person for whom the expenses were paid must have been an eligible student. An eligible student is a person who:

  • Was enrolled in a degree, certificate, or other program (including a program of study abroad that was approved for credit by the institution at which the student was enrolled) leading to a recognized educational credential at an eligible educational institution, and
  • Carried at least half the normal full-time workload for the course of study he or she was pursuing.