I have some bad news for a client and was wondering if anyone might have any ideas of any way around the issue.

The client’s dependent started college in September, 2016. For 2016, they paid for the fall semester in July, 2016 and paid for the upcoming Spring semester in December, 2016. They were able to receive the full $2500 AOC in 2016.

For 2017, they paid for the Fall semester in July, 2017 and paid for the Spring semester on January 2, 2018, thus only half of the tuition for the year was paid in 2017.

Since the fall semester was not paid until 1/2/18, their Scholarships and grants far exceed the qualified expenses paid in 2017. The student ends up with taxable income of over $11,000. NOTE: It is a very expensive private college but the student had tons of scholarships and grants. If the Spring tuition had been paid on December, 2017, however, there would have been no taxable income.

Is there any chance that anyone has any ideas for any way to mitigate this situation?