Paying for college is rough, especially if you’ve resorted to student loans to cover the cost of your education. It’s not all bad though, as you can deduct up to $2,500 in student loan interest at tax time. The deduction is phased out once you gross a specific annual income, though it may not matter as much if you have just graduated.
If you file your taxes using the single status, the deduction for student loan interest begins to phase out for taxpayer who make between $65,000 and $80,000. Between these amounts, the deduction is lessened for the taxpayer, while any amount of income above $80,000 is not entitled to the deduction at all.
This means that law school or business school graduates entering the workforce, or any other lucrative career path may not get the same deduction as a taxpayer who hasn’t been hired immediately after graduation.