From IRS Publication 970: "Also, the institution must be eligible to participate in a student aid program administered by the U.S. Department of Education".
Although University of the People appears on the list of accredited schools (Database of Accredited Post Secondary Institutions and Programs (DAPIP) ), it is not on the Student loan list (Federal Student Loan Program list ).
I take that to mean, it is not an "eligible educational institution" for the federal education credits. Most "online only" schools (it does not also have brick & mortar classrooms) are not eligible.
