Form 1098-E: Student Loan Interest Statement

What Exactly Is Form 1098-E?

Form 1098-E is officially called the "Student Loan Interest Statement." Think of it as a receipt from your loan servicer showing exactly how much interest you paid on your student loans during the previous year. Lenders are required to send this form to any borrower who paid $600 or more in student loan interest over the course of the year. The form itself is straightforward.

Why Does This Form Exist?

The federal government offers a tax deduction for student loan interest, which means you can reduce your taxable income by the amount of interest you paid on qualified student loans. Form 1098-E exists to document that interest payment and make it easier for you to claim this deduction when you file your taxes.

Who Gets a Form 1098-E?

Your student loan servicer will automatically send you a Form 1098-E if you meet the criteria. The main requirement is that you paid at least $600 in interest during the tax year. If you paid less than that, your servicer isn't required to send you the form, though some still do as a courtesy. You'll receive a separate Form 1098-E from each loan servicer you paid interest to during the year.

What Loans Qualify?

Not all loans are created equal in the eyes of the IRS. To generate a Form 1098-E, the loan must be a "qualified education loan," which the IRS defines pretty specifically. The loan must have been taken out solely to pay for qualified higher education expenses for you, your spouse, or someone who was your dependent when you took out the loan.

How to Use Form 1098-E When Filing Your Taxes?

Using Form 1098-E is one of the easier parts of filing your taxes.