My spouse and I received a chunk of cash that we would like to use to pay off student loan debt. The cash is not enough to pay off both of our loans. If we simply put the cash towards the highest interest loans, one of us will no longer have any student loans under our name. We usually file taxes "married filing jointly" in the United States.

When filing jointly, will we receive more tax-deductions if both of us have student loans under our name? If that is the case, would it be better to split the cash across each person's loans?

1 Answer 1


The tax deduction is for the total interest paid during the year. If you have no better use for this money, for example, a deposit into a retirement account (through your employer) to capture a matching deposit, your best option is to simply pay the highest rate loan.

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    Without more information this is the best answer. You should probably pay off a loan with 5+% interest rate (unless you get a company match for something, that would always be better).
    – xyious
    Jun 5, 2019 at 15:48
  • My “better use for the money” also would include higher interest debt such as credit cards and possibly car loans. I just didn’t want to go off on too great a tangent with too much detail. Jun 5, 2019 at 17:05
  • @JoeTaxpayer Thanks for the answer. The most important part for me was "The tax deduction is for the total interest paid during the year". In my case the student loans are the highest interest debt I have Jun 7, 2019 at 17:59

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