<p>I wondered about this when filing my 2008 tax return, but now that the UC has increased student fees 32%, I'm even more curious as I'll be paying 15% more for my final semester.</p>
<p>I'm an independent student who is being financed by scholarship, loans, and work. My student fees (tuition) for 2008/09 were covered by my scholarship, but I still took out the max in unsubsidized student loans. 2009 fall semester, my student fees were covered by most of my scholarship, but I paid about $500 out of the loan. 2010 spring semester, I anticipate paying about $1000 out of the loan for my student fees. (The remainder goes towards books, school supplies, and living expenses - it just about covers my rent and utilities. I work as much as possible to cover anything else, and anticipate needing to work about 5 hours more per week during my final semester to cover the loss of loan money due to the fee increase.)</p>
<p>Student fees are paid automatically before anything else is "refunded" to me. Because my scholarship was enough to cover my student fees in 2008/09, I didn't think I was eligible for the Lifetime Learning Credit. But am I looking at this the wrong way? Should I consider all financial aid fair game for covering tuition, in other words, should I think that my loans are paying my tuition instead of the scholarship? If I think that way, I am eligible for the Lifetime Learning Credit. Or would I only be eligible to claim any tuition that I pay above what my scholarship covers? </p>
<p>Thanks!</p>