Basically, scholarships are reported in the tax year they are received. It doesn't matter what year it's *for*. Likewise, tuition and other qualified expenses are reported in the year they are paid, and it doesn't matter what year they pay *for*.
Keep in mind that colleges work in academic years, and the IRS does not. So the reality is, it takes 5 calendar years to get that four year degree. Overall, everything works out in the wash at the end of 5 calendar years.
