No, that is not what I am saying.  Ideally, the parents and grandparents will have identical worksheets.  The parents are going to use $4000 of TUITION to get AOTC.  The grandparents fill out the worksheets, including the $4000 for tuition, then show $4000 used for the tax credit near bottom of worksheet.

So what is happening?  Depending on amounts, grandparents will pay tax on the interest allocated to the  $4000.  If the amount on the Q exceeds qualifying expenses including the $4000, there will also be a penalty.