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Qualified education expenses defined

The term "qualified education expenses" is used frequently in education circles, but it can mean various things depending on the context. This table describes what the term means in specific situations. (Note: The term "post-secondary education" includes graduate school unless otherwise noted.)

  Qualified education expenses are...
529 college savings plan529 prepaid tuition plan Tuition, fees, books, supplies, equipment, and room and board for post-secondary education (college savings plans generally include graduate school; prepaid tuition plans generally don't)Room and board: qualified only if the student is enrolled at least half time (if student lives on campus, room and board is limited to the actual amount charged by the school; if student lives off campus or at home, room and board is limited to the college's specific published room and board allowance figure)Computers: qualified for 2009 and 2010, along with Internet access and certain software, while beneficiary is in college (previously, computers qualified only if the college specifically required one in order to enroll or attend)Special needs services: qualified if incurred by a beneficiary with special needs in order to enroll or attend
Coverdell ESA Elementary, secondary, and post-secondary education expenses, including tuition, fees, tutoring, books, supplies, room and board, uniforms, transportation, and related equipmentComputers: qualified for students in elementary and secondary school, even if the school doesn't require it; aren't qualified at the post-secondary level unless the college requires one
U.S. savings bonds (to be eligible to exclude interest from federal income tax when bonds are redeemed) Tuition and fees for post-secondary education (courses must be part of a degree or certificate program), and contributions to 529 plans (prepaid tuition plans or college savings plans) and Coverdell ESAsRoom and board and books: not qualified education expenses
Hope credit (renamed the American Opportunity tax credit for 2009 and 2010)Lifetime Learning creditDeduction for qualified higher education expenses Tuition and related expenses only (Hope credit can be used only for undergraduate costs; Lifetime Learning credit and deduction for qualified higher education expenses can be used for both undergraduate and graduate costs)Course-related books, supplies, equipment, and student activities: for Lifetime Learning credit, qualified only if the fees must be paid to the college in order to enroll or attend, for Hope credit, course materials are qualified even if not required by collegeNot qualified expenses (even if they must be paid to the college in order to enroll or attend): room and board, medical expenses (including student health fees), insurance, transportation, and personal living expenses
Student loan interest deduction Tuition, fees, room and board, books, equipment, and other necessary expenses, such as transportation, for post-secondary educationFor loan to be qualified: student must have been enrolled in a degree or certificate program on at least a half-time basis when the loan was obtained