Can i carry over student loan interest deduction for next year if I paid more than the $2500 allowed deduction in 2016, or anything over $2500 is simply lost? Thank you!

No, you cannot carryover student loan interest in excess of $2,500. Per IRS tax code, the maximum deduction is $2,500, if you qualify. See the screenshot below.

Related information:

• Where do I enter student loan interest (Form 1098-E)?
• Can I claim my student loan?

So I was better off investing every $ that I spent repaying loans after 2,500? And waiting to pay until the following year? That way the money I invested would have earned more interest than what was accrued during that time on my loans AND I would have saved money the following year.