If you’ve paid $600 or more a year in interest on a loan, the lender must provide you with Form 1098-E. You aren’t required to itemize deductions in order to claim a student loan interest deduction. Instead, student loan interest is subtracted when totaling your adjusted gross income (AGI) for the year.

Interest paid on personal loans, with the exception of specific mortgage loans, is typically not deductible on a tax return. Although, taxpayers who have a modified adjusted gross income (MAGI) under $80,000 may qualify for a deduction of student loan interest used for higher education. Married couples who file jointly have a higher MAGI threshold of $160,000. MAGI is often determined prior to deducting student loan interest from the gross income reported on your tax return. For 2014, student loan interest deduction can decrease the amount of your taxable income.

The maximum amount that can be deducted is $2,500, even if the interest you paid was greater than that limit.