The student loan interest tax deduction is designed to reduce your taxable income, based on how much student loan interest you’ve paid during the year. It’s important to note that you don’t receive a deduction based on how much you’ve made in payments. Instead, you can only deduct your interest payments, up to $2,500.
The student loan interest tax deduction is an above-the-line deduction, meaning you don’t have to itemize in order to claim it.
