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Usually yes.

The specifics lie in other areas of information that you didn't state in your original post.

The amount of bond interest you can use tax free depends on the amount of qualified educational expenses that are not offset by other means. The key is to start with the amount of total qualified educational expenses and reduce it by the amount of certain awards such as scholarships and grants. Then amounts from dedicated educational accounts (such as a coverdall or 529) and then tax-free payments other then gifts (such as employer payments).

You then would reduce the amount further by the amount you are using to claim a educational credit such as the lifetime learning credit. The remaining amount of qualifying educational expenses is the amount that you could use the bond interest deduction for.

Assuming only the information above, the $21,200 spent on tuition last year would be reduced by $2,000 for the lifetime learning credit which would leave $19,200 in qualifying tution expenses. The $1,900 in bond interest is less then this amount and so would be tax free.

You already said that you qualify for the Lifetime Learning credit so I'll assume you looked at the Hope Credit and decided you didn't qualify for it, it's usually a better deal.
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