The federal government offers a student loan interest deduction on your taxes for interest paid during the year on qualified loans taken out by you or your spouse under the federal student loan program. If your spouse has the same type of federal student loan, the interest can be deducted on a Schedule A, Schedule SE, Schedule SEP, Schedule TRIB, Schedule TEB, or Schedule TAX if your spouse is required to report that interest on a Form 1040. In order to take the deduction, the student loan must have been taken out to help pay for your education at an eligible college or university. This includes a private college, a public college or university, a technical college, a non-technical college, or a technical college and non-technical college, or to pay for an educational program leading to a graduate degree, certificate or other credential.

In addition to the interest deduction, you may claim student loan interest expenses as a dependent on your tax return. However, you can’t deduct student loan interest expenses or student loan guaranty payments as a deduction on your tax return for any year.
Also, you can’t deduct your student loan interest expense on your income tax return.

You can’t claim the interest you have received from your private student loan as a tax deduction. However, you can’t claim a loan you took out to help pay for your education as a deduction on your tax return.

The interest you paid on a loan under the Federal Direct Subsidized and Unsubsidized Loan programs can’t be taken into account in your income in the year you make the loan payment, but the interest you receive on a loan under the Federal Direct Unsubsidized Loan programs can be deducted in the year you receive it. This change came into effect with the consolidation of these two loan programs, which became known as the Federal Direct Consolidation Loan Program and the Federal Direct Consolidation Loan Program, respectively.

If your loan payments exceed the federal standard of 15.6 percent of your discretionary income (the amount by which your AGI minus your household size is more than 150 percent of the poverty guideline for the area in which you live) in the year you make the loan payment, you may be able to avoid paying a penalty by working a few hours in a full-time job. In addition to the Federal Direct Consolidation Loan program, there are also the following other Federal Direct student loan programs:

• Federal Perkins Loan
• Federal Direct Unsubsidized Loan
• Federal Direct Unsubsidized Loan Plus Loan
• Federal Direct Federal Stafford Loan

For more information related to student loans, we suggest visiting https://www.sofi.com/refinance-student-loan/.