Student Loan Interest, 2026
You can deduct up to $2,500 of student loan interest even if you take the standard deduction, the catch is a MAGI phaseout that starts at $85,000 single. This is what you actually get.
You must not file MFS, must not be claimed as a dependent by anyone, and must be legally obligated on the loan, refinanced loans count. Full $2,500 with no phaseout if MAGI is under the start line.
How the math works
- Cap: the lesser of interest paid and $2,500, an above-the-line deduction, so it works even if you never itemize.
- 2026 phaseout (MAGI): single / HoH / QSS begins at $85,000 and ends at $100,000. Married filing jointly begins at $175,000 and ends at $205,000. Married filing separately: ineligible, full stop (community-property spouses in AZ, CA, ID, LA, NM, TX are the exception).
- Phaseout formula: allowed = cap × (phaseout end − MAGI) ÷ (end − start). At the midpoint you get half, at the end line, zero.
- Saving: allowed × your marginal rate, plus 7.65% FICA only if the deduction runs through an employer cafeteria plan.
- Effective discount: tax saved ÷ interest paid, that's the percentage of your interest the government is quietly paying.
What is the 2026 student loan interest deduction phaseout?
It starts phasing out at $85,000 MAGI for single filers and $175,000 for married filing jointly, and is fully gone at $100,000 and $205,000. Married filing separately can't claim it.
Can I take the student loan interest deduction and the standard deduction?
Yes, that's the point of it. It's above-the-line, so it reduces your AGI whether you itemize or take the flat $2,500-plus standard deduction.
How much is the student loan interest deduction worth?
Up to $2,500 off taxable income. At a 22% bracket that's $550 a year, at 12% it's $300, the number shrinks as MAGI climbs through the phaseout band.