Yes, you understand it correctly. All there is to get is the $2,500 credit, and that only takes $4000 of expenses. In 2020 pay only up to $4000 (or the minimum the school requires, apparently $5067?).
There are a few caveats: 1. To be eligible for the AOTC (the most generous education tax benefit) you must not have already completed 4 years of post secondary education. Basically, you must still be an undergrad. You say "the first time that I've been in college that I've been doing my own taxes". Caveat #2. There is a four time limit to claiming the AOTC. Any AOTC claimed by your parents, on their tax returns, while you were a student-dependent counts toward your four times. 3. You must be half time or more to qualify for the AOTC.
The next best tuition tax credit, the Lifetime Learning credit (LLC) takes $10,000 of expenses to get the maximum $2000 credit (it's a straight 20% up to $10K). The LLC is non-refundable. That is, it can only reduce your tax liability. There is no half time or more requirement for the LLC.
