<p>BB, the definition of qualified education expense vary depending on the section of fhe code. </p>
<p>If you check page 6 of the publication 970, you’ll see that table 1-1 provides a slightly different interpretation than the section related to the Hope credit. </p>
<p>Why there are different interpretation is beyond my understanding, but it reinforces the need to stay well within the section that is applicable to your situation. </p>
<p>PS The deduction I will take is indeed against scholarship income. I will still have well over 5 digits of taxable scholarship income. Uncle Sam will gets its share. :)</p>