Line 27 of what? In general, you do not enter anything directly on the forms or worksheets. You follow the interview and TT enters numbers on the forms.
I assume "1098-T Payment received 6,550 Scholarships and Grand 6,569" means Box 1 of your 1098-T has $6550 and box 5 has $6559 in it. In simple terms, you have nothing to report: your expenses are all covered by tax free scholarship. The $19 difference is negligible.
But, there is a tax “loop hole” available. The student reports all his scholarship, up to the amount needed to claim the American Opportunity Credit (AOC), as income on his return. That way, the parents (or himself, if he is not a dependent) can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship. You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.
Using an example: Student has $6569 in box 5 of the 1098-T and $6550 in box 1. At first glance he/she has $19 of taxable income and nobody can claim the American opportunity credit. But if she reports $4019 as income on her return, the parents can claim $4000 of qualified expenses on their return.
Books and computers are also qualifying expenses for the AOC. So, extending the example, the student had another $1000 in expenses for those course materials, paid out of pocket, she would only need to report $3019 of taxable scholarship income, instead of $4019.
I see that if the student claims the scholarship as income, the amount can be applied to the American Opp credit, however, because of the way the form 1099-T is listed, Turbo Tax doesn't allow me to change this and tells me I'm ineligible. How do I overcome this in Turbo Tax?
You effectively have to use a workaround. There are several ways to do it. I assume you are the parent and the student is your dependent.
After entering the 1098-T, you will eventually be asked if any of the scholarship was used for room and board. To make some of the scholarship taxable (re-allocate some of the expenses), you must tell TT how much you want taxable by saying it was used for room &board. Note the wording at that screen “or other expenses”. You didn’t have to literally have used the scholarship for R&B.