A little too much information here...
As far as her scholarships anything beyond qualified expenses is income. You get a way better benefit from the HOPE deductions which are a two year only deal for the first two years of post-secondary education at a *qualified* school. After this you fall into Lifetime Learning which isn't as beneficial.....
Some details:
Loan Qualifications -- the student loan:
must have been taken solely to pay qualified education expenses;
cannot be from a related person or made under a qualified employer plan.
Student Qualifications -- the student must be:
you, your spouse, or your dependent;
enrolled at least half-time in a degree program.
Qualified Education Expenses: *
For purposes of the student loan interest deduction, these expenses are the total costs of attending an eligible educational institution, including graduate school. They include amounts paid for the following items:
tuition and fees
room and board
books, supplies, and equipment
other necessary expenses (such as transportation)
Note: the cost of room and board qualifies only to the extent that it is not more than the greater of the following two amounts:
1) The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for financial aid purposes) for a particular academic period and living arrangement of the student.
2) The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution.
* Even though the same term, qualified education expenses, is used to label a basic component of many of the education benefits, the same expenses are not necessarily allowed for each benefit. The cost of room and board is a qualified education expense as described above for the student loan interest deduction. However, it is not a qualified education expense for some of the other tax-related benefits.
No Double Benefit Allowed -
Adjustments to Qualified Education Expenses
If you pay qualified education expenses with certain tax-free funds, you cannot claim a deduction for those amounts. You must reduce the qualified education expenses by the amount of any tax-free educational assistance and refund(s) you received. Tax-free educational assistance includes:
the tax-free part of scholarships, fellowships or Pell Grants,
employer-provided educational assistance,
veterans' educational assistance,
any other tax-free payments (other than gifts or inheritances) received as educational assistance.
Qualified education expenses are not reduced by amounts paid with funds the student receives as a loan, a gift, an inheritance, or a withdrawal from the student's personal savings.
Now as far as dependant or not you are dealing with two different definitions. For the IRS you have to provide more than 50% of someone's support to qualify them. For educational definition, it is until they are 24 usually unless they have a dependant of their own and/or married. It doesn't matter where her money is coming from, many people make the mistake of thinking grants and other free money is not considered income....only is special cases is it exempt.
As far as flying I doubt that will be allowed unless there is a special circumstance that dictates it as required as part of the course. Lifetime learning is like this....unless the book costs are part of the tuition itself you can't use them...
Still all this said, if she is considering a Journalism major and wants to travel the world to get the degree in it forsaking stateside courses she is going to have to work on getting some sort of sponser probably willing to fork out free cash as a 'gift' (which may still be considered her income, but roughly 20% in taxes is better than 100% of the costs). Everyone would probably love to travel the world for their major.
The last thing to consider as well is 'what kind of income' is she realistically looking at? I know a Master's holding social worker (MSW I think is the degree) with about $60k in monies to repay for a job that pays around $30-35k.....she spends 'rent' on her loans each month....about $6,000 per year/20% of her income. This isn't that uncommon. Chances are she's going to need to turn to loan money to fullfill all these goals. Avoiding loans even if it means an slower graduation is a smart move....if anything an older candidate stands out in the swarms of Bachelor holders that all these free money/tax benefits/B or better GPA free rides have made. I feel getting into and graduation from college has become too easy and it's making holding a degree less valuable. I know many going back for Masters and Ph.Ds as they look the same on paper with just a BA/BS on their resumes.
If you can get in touch with some of similar majors that have done the same kinds of traveling they can advise you *possibly*. Just because someone filed a return and got back 100% of their expenses does not mean the IRS will come knocking on their door to explain their errors and collect the penalties and interest
.
Good luck.
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