If I lived in a college dorm that I am paying for with my student loans, does that classify as paying for more than half of my living expenses?

[Hal_Al]

Simple answer: No. Longer answer: Maybe, but probably not. Yes, the support that comes from student loans is considered as support provided by the student himself EXCEPT if the parent co-signed the loan.

But, you would have to do the math to see if that constitutes half your support*.  That's unlikely, considering tuition is also part of your support. Any scholarships are considered third party support and not support provided by the student.

There's a new urban myth among college students that says they can get a $1000 from the government just for filing a tax form. For most of them, they simply aren't eligible. A full time student, under age 24, is only eligible for the refundable portion of the American Opportunity Credit if he supports himself by working. You cannot be supporting yourself on parental support, 529 plans or student loans & grants. You must have actually paid tuition, not had it paid by scholarships & grants.  It is usually best if the parent claims that credit. 

*The IRS has a worksheet that can be used to help with the support calculation. See: http://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf The support value of a home is the fair market rental value, divided by the number of occupants.  While away at school, you are considered as living with your parent and their home is part of your support.

[Carl]

It is extremely rare for an undergraduate college student to provide more than half of their own support.... even if that student earned a million dollars during the tax year.  There are only two possible ways a student can provide more than half of their own support.

 - The student had a job or was self-employed and was paid a sufficient amount in the tax year that is in excess of the total of all third party support. (scholarships, grants, 529 distributions, gifts from Aunt Mary, money from parents, etc.)

 - The student is the "PRIMARY" borrower on a *qualified* student loan that the parents did NOT co-sign, and a sufficient amount of funds was distributed to the student during the tax year, that is in excess of all third party support received during the tax year.

Additionally, all costs must be "reasonable". For example, if an undergraduate claims they paid $5000/mo for a penthouse suite so they could be close to the college they attended, that is not reasonable for a college student by any stretch of the imagination.

If the student received $100,000 of scholarships, grants and 29 distributions, there is no way on earth you'll ever convince the IRS that it costs you more than $200,000 for the year (including tuition costs) to attend college. So in a case such as that, even if you earned a million dollars you still could not have provided more than half of your own support at "reasonable" cost. Such a claim would be audited and disallowed by the IRS.

[Bsch4477]

Student loans don't constitute income. ... However, the student loans are considered support to test if the person qualifies as your dependent. 

[Carl]

Student loans don't constitute income.

That is true. Borrowed money is not your money. It never was, is not now, and never will be.