Final answer:
Interest paid on a qualified student loan can reduce your taxable income and is true. You can claim this as a deduction when filing your tax return, which can lower your taxable income and consequently the amount of tax you owe.
Step-by-step explanation:
The statement that interest paid on a qualified student loan can be used to reduce tax owing through a tax credit is true. The interest paid on student loans can indeed provide a measure of tax relief for borrowers. When you file your tax return before the yearly deadline, which is usually April 15th, you can claim the student loan interest deduction, which reduces your taxable income. This deduction is available for the interest paid on loans taken out solely to pay for higher education expenses that are paid or incurred within a reasonable period before or after you take out the loan. It is important to note that this benefit is a deduction rather than a credit, which means it can decrease the amount of income subject to tax rather than directly reducing the tax amount owed.