You should get a 1098-T from the school. Look at boxes 1 (Tuition) and 5 (scholarships and grants). If Box 1 is larger, then subtract the scholarships from the tuition. The remaining value is what you can claim for the credit. You can also add in the cost of books that are required for school, that do not appear on the 1098-T.
If the scholarship is larger than the tuition, then the student has to claim the difference as income on their return.
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