If you meet the qualifications, you could potentially exclude the interest from gross income that was used for educational expenses.  See Education Planning for a breakdown of these qualifications and the tax benefit associated with this item.

The screens for savings bond interest and educational expenses come at the end of the interest interview.  It is actually going to appear for a minute like the interview has stopped and gone back to the beginning, but you need to keep going.  Follow the steps below and see the screenshots.

Here are the steps for entering savings bond interest 

• Log into your account and click Take Me to My Return
• Search for “1099INT” and click the "jump-to" link
• Enter the initial details for the interest and click the small checkbox that indicates you have more information to enter
• Enter the savings bond interest in box 3 
• You will come to a screen “Tell us if any of these uncommon situations apply” - click none if none apply and click continue 
• Program will ask if you have more interest to enter - click No (if none)
• Now, you are going to come back to the screen “Here’s the interest we have so far” - click Done (this is the screen where you need to keep going)
• The next screen will ask “Did you cash in any Series EE or I U.S. Savings bonds?" - click Yes
• The next screen will ask “Did you use your U.S. savings bonds to pay for higher education expenses?” - click Yes
• The next screen will ask for details about the bonds you cashed.  Answer the qualifying questions and click continue to finish the interview