Sorry, I don't know much about taxation of international students. But for the American students, the following link has a decent explanation, scroll to the bottom third of the page, of how this works:
http://www.irs.gov/individuals/students ... 74,00.html
Also, if you click on the link for IRS Pub 970, one of the 1st few pages has a chart which gives quick answers to what's taxable and what's not.
But definitely, if you get money for tuition and don't have to pay tax on it, you don't get a deduction or credit for it either - that would be double dipping.
(my SO is a CPA and helps me out with this stuff)