This means that education expenses paid with loan proceeds can be used to claim the Lifetime Learning credit if all other conditions are satisfied. Paying education expenses with loans is considered like paying with cash.
Let's take an example: You take out a loan of $10,000. With that loan, you pay tuition for $10,000. You repay the loan $200 a month ($2.400 a year). You should use $10,000 as Education expenses to claim the Lifetime Learning credit, and not $2,400).
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