Student Loan

I took out a student loan for my granddaughter in order to get a lower interest rate.  I make the monthly payments and she reimburses me.  Can I claim the student loan interest on the Form 1098-E?  I would pass on the tax savings to her.  

Education

You could only claim the student loan interest deduction if the student were your dependent when the loan was made. 

AlanT222
Expert Alumni

Education

You can claim the deduction if all of the following apply:

  • You paid interest on a qualified student loan in tax year 2020.
  • You can take the deduction as a student, or as a parent making payments on your dependent student’s loan. However, you or your spouse, if filing jointly, can't be claimed as dependents on someone else's return.
  • 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.

A qualified student loan is a loan you took out solely to pay qualified higher-education expenses that were:

  • For you, your spouse, or a person who was your dependent when you took out the loan.
  • For education provided during an academic period for an eligible student.
  • Paid or incurred within a reasonable period of time before or after you took out the loan.
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