Tax Benefits for Education

Take advantage of all the ways you can save on college – including tax benefits.

Any money students or parents can save on taxes or college is a big plus. Fortunately, the U.S. government offers several tax benefits for higher education. Consult with a tax advisor or an accountant to see if you’re eligible for these credits or deductions and to find out how to claim them. Here are some things to consider:

Are these tax benefits being claimed by parents or students?

Either parents or students (not both) may claim tax benefits.

  • Many full-time students do not work or receive any taxable income. If that is the case, the parent may be the one to claim the tax benefit.
  • Many parents are employed and pay substantial money towards their child’s education. If parents can claim a student as a dependent, they may be able to claim tax benefits for the child’s college expenses.
  • Remember, to please see the IRS website for more details on tax filing status or consult with a tax professional.

What kinds of educational tax breaks are there?

There are two common types of college tax benefits:

  • Tax deductions and credits – tax breaks for college-related expenditures made by students or the parents of students.
  • Tax advantages for college savings – tax benefits for college savings plans created by parents for their children, often started when their kids are very young.  

Note: The IRS states that you may be restricted to claiming only one educational tax benefit per tax year- “no double benefit allowed.”1 For more information, please see IRS Publication 970 or go to the IRS website.

Tax deductions and credits

American Opportunity Tax Credit (AOTC)

The AOTC reduces the amount of tax you pay by giving you a credit for qualified education expenses such as tuition and course materials for the first four years of college. The AOTC:

  • Depending on income, can be claimed by the student or a parent who claims the student as a dependent. 
  • May be claimed for no more than 4 tax years (use of the Hope scholarship counts towards the 4 years).
  • Tip: pay attention to the income limits for this credit in order to claim the credit.

Lifetime Learning Credit3

Like the AOTC, the Lifetime Learning Credit reduces the amount of tax you pay by giving you a credit for qualified education expenses, but it has different requirements and provisions. The Lifetime Learning Credit:

  • Can be claimed by the student or someone who claims the student as a dependent.
  • Unlike the American Opportunity Credit, does not have a limit on the number of years it can be claimed.
  • Tip: pay attention to the income limits for this credit in order to claim the credit. 

The American Opportunity Tax Credit and Lifetime Learning Credit are just two of the most popular tax benefits. You may also wish to take advantage of the following:

Student Loan Interest Deduction

Scholarships, fellowships and grants reductions (awards like these may count as income and could be taxable unless tax benefits are requested)

Tax advantages for college savings

The U.S. government gives a variety of tax breaks to parents and students who save for a higher education). Some of the most common tax-advantaged programs include:

  • Coverdell Education Savings Account - a savings account that is set up to pay the qualified education expenses of a designated beneficiary1
  • 529 Plan –a tax-advantaged college savings plan also known as a qualified tuition plan may allow for pre-tax savings benefits
  • IRA Withdrawals to pay for qualified higher education expenses

Remember, if you don’t take advantage of the tax benefits that are available, you’re just leaving money on the table!

Apply for a new SunTrust private student loan and you may be able to transfer the balance of an existing loan.


Learn More

Many college students don't understand money management. Learn how to be smart about your money with our short financial literacy course.


Learn More

Important Information

This content does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. View and compare the available features of SunTrust private student loans.

Union Federal is a federally registered trademark of Cognition Financial Corporation used by SunTrust Bank under license. The Union Federal Private Student Loan is funded by SunTrust Bank and is not offered in connection with any other lender or the federal government. Cognition Financial Corporation is not an affiliate of SunTrust Bank.

Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue these programs without notice. These loan programs are subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.

1  Source: Department of the Treasury Internal Revenue Service: Publication 970, Tax Benefits for Education for use in preparing 2017 Returns.

2  Source: Department of the Treasury Internal Revenue Service: American Opportunity Tax Credit.

3  Source: Department of the Treasury Internal Revenue Service: Lifetime Learning Credit.

Having trouble making payments? Got questions?

We’re here to help. Please contact one of our student loan specialists today.

Loans Resource Center

  • Contact

  • Wires

      For more details about Wire Transfers with SunTrust, call 800.947.3786.


      SunTrust incoming wire instructions:

      • For domestic incoming wires, use Routing ABA: 061000104
      • For international incoming wires, use SWIFT/BIC: SNTRUS3A
      • Beneficiary account number: SunTrust full account number
      • Beneficiary name: The name as it appears on the SunTrust account

      SunTrust incoming wire instructions are also available by calling 800.947.3786 - option 1

Investment and Insurance Products:

Are Not FDIC or any other Government Agency Insured   Are Not Bank Guaranteed  May Lose Value 

© 2018 SunTrust Banks, Inc

equal housing logoSunTrust Bank is an Equal Housing Lender. Member FDIC

equal housing logoEqual Housing Lender. SunTrust Mortgage, Inc

SunTrust, SunTrust Mortgage, SunTrust PortfolioView, SunTrust Robinson Humphrey, SunTrust Premier Program, AMC Pinnacle, AMC Premier, Access 3, Signature Advantage Brokerage, Custom Choice Loan and SunTrust SummitView are federally registered service marks of SunTrust Banks, Inc. All other trademarks are the property of their respective owners.

Services provided by the following affiliates of SunTrust Banks, Inc.: Banking products and services are provided by SunTrust Bank, Member FDIC. Trust and investment management services are provided by SunTrust Bank, SunTrust Delaware Trust Company and SunTrust Banks Trust Company (Cayman) Limited. Securities, brokerage accounts and insurance (including annuities) are offered by SunTrust Investment Services, Inc., a SEC registered broker-dealer, member FINRA, SIPC, and a licensed insurance agency. Investment advisory services are offered by SunTrust Advisory Services, Inc., a SEC registered adviser. GFO Advisory Services, LLC is a SEC registered investment adviser that provides investment advisory services to a group of private investment funds and other non-investment advisory services to affiliates. Mortgage products and services are provided by SunTrust Mortgage, Inc.

SunTrust Mortgage, Inc. - NMLS #2915, 901 Semmes Avenue, Richmond, VA 23224, 1-800-634-7928. CA: licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, IL: Illinois Residential Mortgage Licensee #MB-989, Department of Financial and Professional Regulation, 100 W. Randolph, Suite 900, Chicago, IL 60601, 1-888-473-4858, MA: Mortgage Lender license #-ML-2915, NJ: Mortgage Banker License - New Jersey Department of Banking and Insurance, NY: Licensed Mortgage Banker—NYS Department of Financial Services, and RI: Rhode Island Licensed Lender.

"SunTrust Advisors" may be officers and/or associated persons of the following affiliates of SunTrust Banks, Inc.: SunTrust Bank, our commercial bank, which provides banking, trust and asset management services; SunTrust Investment Services, Inc., a registered broker-dealer, which is a member of FINRA and SIPC, and a licensed insurance agency, and which provides securities, annuities and life insurance products; SunTrust Advisory Services, Inc., a SEC registered investment adviser which provides Investment Advisory services.

SunTrust Private Wealth Management, International Wealth Management, Business Owner Specialty Group, Sports and Entertainment Group, and Legal and Medical Specialty Groups and GenSpring are marketing names used by SunTrust Bank, SunTrust Banks Trust Company (Cayman) Limited, SunTrust Delaware Trust Company, SunTrust Investment Services, Inc., and SunTrust Advisory Services, Inc.

SunTrust Bank and its affiliates do not accept fiduciary responsibility for all banking and investment account types offered. Please consult with your SunTrust representative to determine whether SunTrust and its affiliates have agreed to accept fiduciary responsibility for your account(s) and if you have completed the documentation necessary to establish a fiduciary relationship with SunTrust Bank or an affiliate. Additional information regarding account types and important disclosures may be found at

SunTrust Robinson Humphrey is the trade name for the corporate and investment banking services of SunTrust Banks, Inc. and its subsidiaries, including SunTrust Robinson Humphrey, Inc., member FINRA and SIPC.