Room and board is not a qualified education expense, so any scholarship money earmarked for that purpose becomes taxable. If the scholarship was used entirely for tuition and fees, do not designate any of it for room and board.

Box 2 reports amounts of qualified expenses billed by the school (not what was actually paid - it's up to you to verify that the same amount was actually paid). It's not unusual for that to be greater than a scholarship amount. Compare amounts to billing statements provided by the school.