Parent Paid Your Student Loan Interest? Who Can Deduct

Guides · Updated October 17, 2026 · 2 min read

General information, not tax, legal or financial advice. We are not the IRS or the Department of Education. Check IRS.gov or a qualified tax professional. Sources read on October 17, 2026. Dates and amounts after 2026 are expected. Examples use made-up numbers. This page contains no affiliate links.

Short answer: Pub. 970 says that if you are the person legally obligated to pay the interest and someone else pays interest on your behalf, you are treated as receiving the payment from them and then paying the interest. So you may deduct it if you qualify. The deduction belongs to the borrower who is legally obligated, not to the person who paid.

IRS examples

• Employer-type payment: an intern's nonprofit paid interest, reported as wages in box 1 of the W-2. The intern can deduct it (other requirements met).
• Gift from a parent: a parent paid the first monthly payment as a gift; no one claimed the borrower as a dependent. The borrower can deduct that interest.
• Parent claims you as a dependent: you paid $1,100 interest on your own qualified loan and your parents claim you as a dependent on their return. Neither you nor your parents may deduct it.

Things to check

1. Who is legally obligated? Only that person can deduct (Parent PLUS borrowers are the parent).
2. Is anyone claiming the borrower as a dependent? If so, no deduction.
3. Filing status: not married filing separately.
4. MAGI under the limit (phaseout).
5. Employer payments under an educational assistance program can't also be deducted (employer benefit).

Related

Parent PLUS limits and consolidation

FAQ

Can a parent deduct interest on a loan the child owes?

Per the examples, no, unless the parent is the legally obligated borrower.

Does a gift create gift tax?

Not covered.

What we could not verify