Deductions & credits

As a resident alien you are taxed just like any other US citizen. You are required to report WORLDWIDE income, that includes the scholarship and would also include interest income or any other income you have abroad. You also have to disclose foreign accounts on the FBAR form Fincen 114 (filed separately), if you had at one point during the year $10,000 or more in your foreign accounts (the sum of all accounts). That is the law in the US. You might not like it, but if you want to live/study in the US for longer than you are considered a nonresident alien, you have to accept the law as is. Since you can claim the treaty exemption for up to three years, the scholarship wont be taxable in the end, but you HAVE to report it to be able to claim the treaty exemption.