Only those who are legally obligated to pay the loan, can claim the interest reported on SCH E. In your case, both parties are eligible to claim it. So yes, you'll have to do the math to figure out who paid what in interest. Generally though it's simpler to just let the one who paid the most interest just claim it all. But by the "letter of the law" the criteria to claim it is.
1. Must be obligated to pay it,
2. Must have actually paid it.