What are qualified education expenses?
Generally the IRS has stated that "qualified education expenses" are amounts paid in 2009 for tuition and fees required for the student’s enrollment or attendance at an eligible educational institution. Thus, according to the IRS, it does not matter whether the expenses were paid in cash, by check, by credit card, or with borrowed funds.
The IRS does not consider the following expenses as qualified education expenses;
1. Room and board, insurance, medical expenses (including student health fees), transportation, or other similar personal, living, or family expenses.
2. Course-related books, supplies, equipment, and nonacademic activities, except for fees and expenses required to be paid to the institution as a condition of enrollment or attendance.
3. Any course or other education involving sports, games, or hobbies, or any noncredit course, unless such course or other education is part of the student’s degree program.