Qualified Education Expenses

Funds Used

You can claim an education credit for qualified education expenses paid by cash, check, credit or debit card or paid with money from a loan. If you pay the expenses with money from a loan, you take the credit for the year you pay the expenses, not the year you get the loan or the year you repay the loan.

Qualified Education Expenses for Education Credits

Qualified expenses are amounts paid for tuition, fees and other related expense for an eligible student that are required for enrollment or attendance at an eligible educational institution. You must pay the expenses for an academic period* that starts during the tax year or the first three months of the next tax year.

Eligible expenses also include student activity fees you are required to pay to enroll or attend the school. For example, an activity fee that all students are required to pay to fund all on-campus student organizations and activities.

For AOTC only, expenses for books, supplies and equipment the student needs for a course of study are included in qualified education expenses even if it is not paid to the school. For example, the cost of a required course book bought from an off-campus bookstore is a qualified education expense.

See our Education Credits Frequently Asked Question page for more information.

Expenses that Do Not Qualify

Even if you pay the following expenses to enroll or attend the school, the following are not qualified education expenses:

Room and board

Insurance

Medical expenses (including student health fees)

Transportation

Similar personal, living or family expenses

Sports, games, hobbies or non-credit course

Expenses for sports, games, hobbies or non-credit courses do not qualify for the education credits or tuition and fees deduction, except when the course or activity is part of the student’s degree program. For the Lifetime Learning Credit only, these expenses qualify if the course helps the student acquire or improve job skills

What if the Student Withdraws from Classes?

You can claim the credits for any amounts not refunded if the student withdraws.

Refund of Qualified Education Expenses

See Publication 970 for information on what to do if you receive a refund of qualified education expenses during the tax year.