In order to use the "loop hole", he would have to declare $17,311 as taxable. There are several ways to do it, in TurboTax (TT), including designating $17,311 as used for room & board.
The way TT is designed requires you to complete the “Education Information” sub-section, as well as enter numbers. In particular, be on the lookout for a screen “education expenses used for a tax credit”. It will usually be prepopulated (sometimes with $10K instead of the more appropriate $4K). You can change it for the amount you want to allocate to the ed credit, in your case $4000. If you don't get that screen, check the student information worksheet. You can change it there (line 17). Make the change in the first column. Remember to enter any book and computer expenses, to reduce the taxable amount.
The short cut is to enter a 1098-T with 0 in box 1 and the manually calculated taxable amount ($17,311 less any book/computer expenses) in box 5.
