Correct. Neither party would be able to deduct any interest. The rules for deducting student loan interest are below. The student (son) would not be eligible because he is being claiming as a dependent on another return. And the parents would not be eligible because they did not actually pay interest on a qualified student loan during the year.
You can claim the deduction if all of the following apply:
-
You paid interest on a qualified student loan in tax year 2016;
- 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.
https://www.irs.gov/taxtopics/tc456.html
