Student had scholarships that exceeds the amount billed has to pay taxes on difference when the money was never received by student.

[Char945]

The student never received the difference beween what was billed and scholarship amount.  In addition we paid $2,700 toward the semester.  Doesnt make since.

[Opus 17]

Well, where did the scholarship money go?

[Char945]

that is a good question.  the student didn't get it I would think it should be returned to scholarship giver. The person handling the acct. dept stated was was a late scholarship for spring 2017 but it has all been paid.   Both semesters extra money was paid because there was not enough scholarship money.  student graduated Dec 2017.

[Opus 17 · Accepted solution]

So it sounds like you have a situation something like this.

Student attended fall semester, tuition was $7700. Received $5000 scholarship, parents paid $2700.  Student did not attend in Spring, but the 1098-T shows $10,000 of scholarship (assuming fall and spring semesters.)

The 1098-T is advisory, you can report your own actual expenses that you can prove with your billing statements from the college.  However, if the school does not issue a corrected form, the IRS may send you a letter of inquiry.  You would respond with a letter enclosing documents proving what you actually paid.  In the example above, you would report $7700 as tuition actually paid, and $5000 as the non-taxable scholarship, leaving $2700 paid from your own funds that would be eligible for any tuition credits that you qualify for.

[Opus 17]

Also remember, monies paid for room and board, including scholarships, is taxable and not eligible for tuition credits.  Forgot to mention that.