The taxable scholarship would always be the child's income. So, you can input the 1098-T on her tax return just to get the scholarship in her income. The IRS doesn't see all the background entry- they'll only see the taxable scholarship on line 7 of her 1040. Either way, she'd have a tax return to file.
As far as who should claim her (i.e. should she claim herself?), that depends on whether she provides more than half of her own Support. Does she also work? Does she live in your house?
Just keep in mind:
Scholarships. A scholarship received by a child who is a student isn't taken into account in determining whether the child provided more than half of his or her own support.
(You would count the taxable part, but not the whole thing)
