we don't know what she entered which has a huge bearing on how her return turns out.
in her return, there should be a student info worksheet (SIW). answering the questions incorrectly or omitting the worksheet completely is what could result in Turbotax concluding that the scholarship was taxable.
as to the LLC (or even the AOC)
since she is not claimed as a dependent, she qualifies to get the credit (but the LLC is not refundable). To get the proper results the student info worksheet (SIW) must be completed correctly. if she is not going for a degree, certificate or credential then the scholarship is taxable (IRC Code Sec 117). The SIW has questions about this
if she qualifies and the SIW is completed correctly form 8863 should appear in her return with part 3 completed
you did not explain why she/you would not qualify for the American Opportunity Credit. Admitedly the AOC has many restrictions.
