John just received his student loan statement that indicates that he has paid $3,500 of interest during this tax year on his student loan which was originally used for qualifed higher education expenses. His AGI is $35,000. How much of the interest may he deduct? $2,500 as an adjustment to income. $1,500 as an itemized deduction. $3,000 as an itemized deduction. $1,000 as an adjustment to income