Unfortunately, no. The graduated student could not deduct the interest if they are not legally liable for the loan.
You can claim student loan interest as a deduction if all of the following apply:
- You paid interest on a qualified student loan in tax year 2017;
- You're legally obligated to pay interest on a qualified student loan;
- Your filing status isn't married filing separately;
- Your MAGI is less than a specified amount which is set annually; and
- You or your spouse, if filing jointly, can't be claimed as dependents on someone else's return.
The other option is to give the payments to your parents and have them make the payments. It still won't help you on your taxes, but they would be able to use the deduction because they would meet all of the requirements above. If the total amount of payments for 2018 are under 30,000 dollars (assuming both of your parents are on the loan - 15k if only one is one parent is on the loan) you would not have to worry about gift tax returns.
