Yes, that’s the point, isn’t it? In a a family whose student receives a full ride scholarship, and also works year round (full-time summer and part-time during the school year), that student is already going to have a significant tax burden. If they can increase that burden slightly in order to claim a $2,500 credit on the parents’ return, which money can then be used to pay the student’s taxes, problem solved!
Increasing one family member’s taxes by a few hundred dollars in order to get a $2,500 credit on another family member’s return is a good strategy! Whether it works for any particular family depends on the numbers . . . and each family needs to crunch the numbers for all possible scenarios (claiming the full AOTC, claiming only a partial AOTC, or claiming no AOTC) to determine what works best for them.
In our family, a partial AOTC was the best solution . . . but it took me hours to find the “sweet spot” that yielded the maximum return (lowest tax + highest credit). Not an easy process, but definitely worth it in the end!