@Bsch4477 wrote:
If the student was not your dependent you can’t deduct the interest. If the student is not a dependent of someone she can deduct the interest. If she is a dependent no one can deduct the interest unless the one claiming the dependency is also a co-signer.
This is the better answer here. To deduct student loan interest, you must be the person who made the payments, and the student must be yourself, or your dependent at the time the loan was made, and you must be the borrower or a co-signer. If the child was your dependent when the loan was made, then you can deduct the interest, if you pay it, even if the child is no longer your dependent. But if the child was not your dependent when you co-signed the loan, you can't deduct the interest. Sorry.
However, your granddaughter can deduct the interest as if she had paid it herself, as long as she meets the other qualifications to deduct student loan interest. See page 34 of publication 970. https://www.irs.gov/pub/irs-pdf/p970.pdf
