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It would be best if this arrangement was formalized in writing to categorize the education expense payment as a loan to the student (which it sounds like it legitimately is). Loans to the student are considered money spent by the student for their own education. Therefore, the education credits should be claimed by the student.
The above is assuming, of course, that the student is not a dependent of the person providing the loan. Education credits are generally only available for taxpayers and their dependents. A parent/guardian can often save a lot more money in taxes claiming an education credit than a dependent student can save.
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