Tax credit for financed higher education.

Maybe you thought you weren’t eligible for an education credit because you didn’t pay out of pocket for tuition and fees. Think again. You can claim an education credit even though some or all of the qualified expenses are paid with the proceeds of a loan. You can also claim the credit even though these expenses were paid by someone other than you, your spouse, or your dependent. Say a grandparent pays a grandchild’s tuition at State U. The payment is treated as having been made by the student, and if the student is dependent, the credit is yours (assuming you meet other eligibility tests).