You're not required to claim the college student as a dependent, but the college student is unable to claim him/herself if he/she is eligible to be a dependent on someone else's return.  It's also unlikely that the AOTC will be refundable, but if the college student has enough income to generate an income tax, that tax can be offset by a non-refundable AOTC.

The trade-off would likely be the loss of the $500 ODC on the parent's return.  There may also be state tax implications to consider.  Also, keep in mind you get to claim AOTC in no more than 4 tax years for the same qualifying individual.  Most college students are enrolled for at least 5 undergraduate years.  So it might be best to skip this year and take the credit in year 5.  Just food for thought, this strategy only works if you can pay the Senior year Spring tuition in January (year 5) instead of December (year 4), or if they go straight to grad school.

Rick