Best option (parents)? T-1098 form with 27k(box1) and 24k(box5)? Can she file 1040) 14k income? so Qualified expenses 27-14=13k? Then we can claim dependent and AOC?

Basically which is the best strategy for parents ? Is my understanding that the student can choose from T-1098 box 5 (scholarship) to take that amount or part of it as income for the 1040.  

The idea is to be able to claim AOC and the student as dependent.