You do not claim college loans (except interest, as explained in another reply). What you claim is what the loan money was spent on, tuition, fees and course materials (but not room & board). Those costs will qualify you for an education credit. If your daughter is your dependent, you claim the education credit, even though the expenses were paid by her loan money.
You use form 8863, which is included in the TurboTax software.
If she is your dependent, she cannot claim the education credit, on her own return. Even if she is not your dependent, there are restrictions. 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.
