In September 20X6, a married couple cashed qualified Series EE U.S. Savings Bonds which they had purchased in 20X1. The proceeds were used to help pay for their son's college tuition. They received gross proceeds of $4,000, representing principle of $3,600 and interest of $400. The qualified higher education expenses they paid in 20X6 totaled $2,500. How much of the $400 interest can the couple exclude from gross income in 20X6?

A) $0

B) $400

C) $325

D) $250