Can I report my student loan interest payments if I used a tax exempt award to pay my loans this year?

[bronwyn-williams]

I am the recipient of a "tax exempt" award from the Massachusetts Department of Public Health for working in an underserved community - a lump sum of money which I used (in addition to my monthly payments) to pay down my student loans this year.  Am I allowed to report all the interest I paid and take the 'credit' for it on my taxes?

[MinhT · Accepted solution]

Money from the tax-exempt award is your money, even if it was not taxed.

Therefore, you can claim all the student loan interest as a deduction (up to the limit of $2,500).