My son's grandmother (who has passed) purchased a EE savings bond in 1997 and made my son the beneficiary. The bond was cashed last year (2018) and used to help pay for his college expenses. The interest on the bond currently shows up in his tax return as interest income. I don't see anywhere in the return where any of this income is excluded. I believe all the following qualifying rules are met.
1. The EE bond was issued after 1989.
2. The owner of the bond (his grandmother) was older than 24 when she purchased the bond.
3. The education costs were paid in the same year the bond was redeemed.