My son is in his first year of college. We claim him as a dependent, but his student loans are in his name with my husband as a co-signer. We are paying on the loans as much as we can while he is in school. We did the student loans rather than the parent loans so that we could pay if we were able but not be obligated until he graduates if money gets tight. Are we eligible to take the tax credit?

Yes. If you claim him as a dependent (and provided your Adjusted Gross Income is not too high), you get to claim BOTH the American Opportunity Tax Credit AND the interest on the student loan, even if the loan is in your son's name.