"But he can't enter education expenses because he is claimed on my tax return."
The 1098-T, like the 1099-Q, is only an informational document. The numbers on it are not required to be entered onto your tax return. However receipt of a 1098-T frequently means you are either eligible for a tuition credit or possibly your student has taxable scholarship income.
If you claim the tuition credit, you do need to report that you got one or that you qualify for an exception (the TurboTax interview will handle this)
You claim the tuition credit, or report scholarship income, based on your own financial records, not the 1098-T.
Sometimes, the 1098-T (and other expenses) will be entered on both the parent and the student's tax returns, with adjustments. Such as, your situation, where you claim the tuition credit (since he's your dependent) and he might have to report 1099-Q earnings as taxable.
