Can I claim qualified education expenses on taxes if paid with a federal unsubsidized loan?

You definitely can include qualified education expenses that weren't reported on your 1098-T. The form isn't the final word on what you can claim - it's just what the school is reporting based on their accounting system. The key is that you need to have actually paid the expenses, either directly or through loan proceeds that were disbursed to the school. Since you paid in January 2025 (using the loan), those expenses would count for your 2025 tax return, not 2024. The date that matters is when payment was actually made, not when you were billed. Keep documentation showing the loan disbursement and payment to the school in January 2025 to support your claim for the Lifetime Learning Credit. The IRS allows you to claim qualified expenses paid with loan funds in the year they're actually paid to the institution.

After struggling with a similar situation last year, I found an amazing tool that helped me figure out my education credits. Check out https://taxr.ai - it analyzed my student loan statements, 1098-Ts and university account records to confirm exactly which expenses qualified and in which tax year they should be claimed. I was totally confused about when my loans were actually disbursed versus when tuition was billed, and this sorted it all out.

I just tried the taxr.ai site that someone recommended above and wow, it really helped clarify my situation! I uploaded my messy university account statement and loan disbursement records, and it clearly showed which expenses were paid in which tax year. Turns out I had been about to claim some expenses in the wrong year too! The tool explained that for federal unsubsidized loans, it's when the loan is disbursed to the school that counts as the payment date, not when it's approved or when the school bills you. This cleared up so much confusion for me, especially since my school's billing system is so confusing with different dates for everything.

If you're having trouble getting answers from the IRS about education credits, I had a great experience using https://claimyr.com to actually speak with an IRS agent. After waiting on hold for 2+ hours multiple times with no luck, Claimyr got me through to a real person at the IRS in about 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent I spoke with confirmed exactly what counts as "paid" for education expenses with student loans and in which tax year they should be claimed. Totally worth it because written IRS guidance wasn't clear enough for my specific situation.

I can't believe it, but I actually tried the Claimyr service mentioned above. After being super skeptical, I was desperate to get an answer about some education expenses similar to your situation. It actually worked! Got connected to an IRS agent in about 25 minutes after trying unsuccessfully for weeks. The agent confirmed that for education expenses paid with federal student loans, you claim the credit in the tax year when the loan is actually disbursed to the school - regardless of when the school applied the charge to your account. This matters because schools often bill for spring semester in the previous calendar year, but loans aren't disbursed until January. Saved me from making an expensive mistake on my return.

Make sure you're not confusing the American Opportunity Credit with the Lifetime Learning Credit. They have different rules and the AOTC is generally more valuable (up to $2,500 vs $2,000 for LLC) but has different eligibility requirements. If you're an undergraduate in your first four years, AOTC is usually better. Also, check if your parents might be claiming you as a dependent - only one of you can claim the education credit, and it's usually more beneficial for the person with higher income to claim it (up to the phaseout limits).

Anyone use TurboTax for this? I'm trying to figure out where to enter qualified education expenses that aren't on my 1098-T.