Since personal interest is generally non-deductible, deductions must meet several tests:
- You must be the person liable on the debt and the loan must be for education only (not an open line of credit).
- Your income can't exceed $160,000 on a joint return or $80,000 for single filers. Married couples filing separately cannot take the deduction.
- You can't deduct if you're claimed as a dependent.
- Deduction ceiling is $2,500 (starting in tax year 2013).
