Why does all scholarship money get added to total income? Most of my scholarship money was paid directly to my school to cover tuition.

[NCperson]

all scholarship money is not necessarily added to income.  Do you have the 1098T form? please post Box 1 and Box 5 and I can explain 

If box 5 exceeds box 1 that difference is income.......

[Carl]

All third party income (scholarships, grants, 1099-Q distributions, etc) are reported as taxable income *initially*. It's taxability is offset by the qualified education expenses that 3rd party income is used to pay for. If any of that 3rd party income is not used for qualified education expenses, then it's taxable income to the student.