Form 1098-E: Student Loan Interest Statement Guide

IRS Form 1098-E, titled "Student Loan Interest Statement," is an information return that reports student loan interest received from a borrower. Lenders file this form with the IRS and provide a copy to borrowers who can use it to claim the student loan interest deduction.

The form reports:

• Box 1: Student loan interest received from the borrower during the year
• Box 2: Whether the loan originated before September 1, 2004 (checkbox)

The simplicity of Form 1098-E reflects the straightforward nature of the student loan interest deduction. Unlike mortgage interest, there is no box-by-box breakdown of different types of interest or adjustments.

The following entities must file Form 1098-E:

• Student loan servicers that receive interest payments
• Banks and credit unions that hold student loans
• Government agencies (Department of Education loan servicers)
• Private lenders that provide student loans
• Any entity that receives at least $600 in student loan interest from an individual

$600 Threshold: You must file Form 1098-E if you received $600 or more in student loan interest from a borrower during the calendar year. Interest from loans used to pay for qualified higher education expenses qualifies for reporting.

A qualified student loan must be:

• Incurred solely to pay qualified higher education expenses
• Taken out for the taxpayer, spouse, or dependent
• Incurred while the student was enrolled at least half-time in a degree program

Qualified higher education expenses include:

• Tuition and fees
• Room and board
• Books, supplies, and equipment
• Other necessary expenses (transportation, etc.)

Note: Loans from a related person or loans under a qualified employer plan do not qualify. Federal Direct Loans, Perkins Loans, PLUS Loans, and most private education loans do qualify.

Taxpayers can deduct up to $2,500 of student loan interest paid during the year. This is an "above-the-line" deduction, meaning it reduces adjusted gross income (AGI) and is available even if you do not itemize deductions.

Key requirements to claim the deduction:

• You paid interest on a qualified student loan during the tax year
• You are legally obligated to pay the interest (the loan is in your name)
• Your filing status is not married filing separately
• No one else can claim you as a dependent
• Your modified AGI is below the phase-out thresholds

The deduction is claimed on Schedule 1 (Form 1040), line 21.

The student loan interest deduction phases out at higher income levels. The phase-out ranges are adjusted annually for inflation.

Note: These amounts are subject to annual inflation adjustments. Check IRS Publication 970 for current year amounts.

Lenders must meet the following deadlines for Form 1098-E:

For specific dates including weekend adjustments, see our Form 1098-E Filing Deadlines.

Yes. Even if you paid less than $600 in student loan interest and did not receive Form 1098-E, you can still claim the deduction if you meet the requirements.

• You can use your loan statements to determine the amount of interest paid
• Contact your loan servicer to request your total interest paid for the year
• Keep records to support your deduction in case of an audit

The $600 threshold applies to the lender's filing requirement, not your ability to claim the deduction.

If someone else makes payments on your student loan, you may still be able to claim the deduction. The IRS treats such payments as if:

1. The other person gave you the money, and
2. You then paid the interest

This means if a parent pays interest on their child's student loan (where the child is legally obligated to pay), the child may claim the deduction if they meet all other requirements.

Note: Parents cannot claim the deduction for payments they make on their child's student loan unless they are the co-signer and legally obligated to pay.