Where the Student Loan Tax Deduction Gets Used the Most

The Tax Cut and Jobs Act introduced in Congress last week eliminates the student loan interest deduction. The deduction, of up to $2,500, is available to borrowers who earn up to $80,000 in income (or $160,000 if filing jointly), and is available regardless of whether a tax filer uses itemized deductions. It is a key benefit for lower and middle income taxpayers who are pursuing higher education. The average amount of interest claimed is about $1,100.

The distribution of tax filers claiming the benefit varies across cities, from a high of 17.4% of filers in Fargo, ND to a low of 4.0% in Texarkana, TX.

Below are the metros most exposed to the elimination of the student loan deduction.

We utilized data from the IRS SOI (Statements of Income) files for the 2015 year, which are from 2016 tax filings. The data contain the total number of filings and total dollar amount for a wide range of tax items.

For the student loan interest deduction, we calculated the percentage of returns claiming a deduction for each metropolitan area and used this as our ranking criteria. We also show the average amount claimed for each filer claiming the deduction.

Top metros for the student loan tax deduction

Among the 50 largest metros

Among all metro areas