Can I claim payments on a student loan if the loan is from a foreign country?

[NCperson · Accepted solution]

@karen-klausen-ma payments are not tax deductible.  The interest is tax deductible up to $2500 

the issue is not whether the loan is from a foreign country, the issue is who lent you the money. 

Loans from the following sources aren't qualified student loans.
• A related person.
• A qualified employer plan

please review page 31

https://www.irs.gov/pub/irs-pdf/p970.pdf

[karen-klausen-ma]

Thank you that was helpful!

[Opus 17]

You don't provide enough information for a definitive answer.  Please read the section on student loans from publication 970.

https://www.irs.gov/publications/p970#en_US_2022_publink1000298880

To be deductible, the interest must be used for qualified educational expenses.  That means, among other things, the school must be located in the US or must be a foreign school that is qualified to participate in US government student aid programs.  You don't say if the school is US or foreign.  (The bank doesn't have to be US, but the school must be US or US-eligible.)

The loan must be taken out in a timely manner connected to the education.  For example, you can't pay cash for college, then 3 years later take out a loan to reimburse yourself and call it a qualified loan.  You must also be able to trace the loan interest to the education.  If you got a loan from a bank and used some of the money for travel or to build a house, and some for education, it would generally not qualify unless you could exactly trace the interest you pay to the qualified educational expenses.

There are a few other rules as well.  Please read publication 970.