I don't know if this will help clarify things or not, but I"m offering it in the hopes it makes things easier and simpler for you.
Scholarships - Can only be used for the qualified education expenses of tuition, books and lab fees. That's it. There are no exceptions.
Grants - Can only be used for the qualified education expenses of tuition, books and lab fees. However, if the grant letter specifically and explicitly states the money can be used for other things then it can be used for those "other things" that are explicitly identified in the grant letter. However, those other things stated in the letter must be in "direct support" of the education. (example & explanation of direct support provided later.)
Coverdell/529 funds - Can only be used for the qualified education expenses of tuition, books and lab fees, ***AND*** the unqualified but allowed expenses of room and board. Now for the breakdown of "room & board."
Room - the cost of rent to include utilities. Generally internet access is not included in that. However, many college courses absolutely require the student have internet access in order to complete and submit assignments. Therefore so long as that requirement is in the course syllabus (of any one course the student is taking) including Internet access cost is not an issue. Also note there is a limit on what can be claimed for the "room" part of room and board.
If the student elects to live in campus provided housing, then the rent they pay for that already includes utilities. However, if the student elects to live off-campus in non-campus provided housing by renting from a third party, then the amount claimed for the "room" part of room and board can not exceed what would be paid to the college if the student lived on campus.
In a case where campus housing is not an available option to the student, the college will provide the student a letter stating that on campus housing is not available and they have "no choice" but to seek housing elsewhere. In such a case you are not limited to claiming what the college charges. But whatever you do claim *MUST* be reasonable. What's reasonable depends on where the student is at, of course. As an example, when Michael Jordan's son attended UCF, his first year his dad paid for a $5000/month place for him to live in. The IRS found this to be "extremely" unreasonable for an undergraduate college student and only allowed $1200/mo for the months he was enrolled as a full time student.
Now if you or the student signs a 1 year lease and they don't attend as a full time student for all 12 months of the year, that's gonna suck tax-wise. If the student is not enrolled for the summer semester (typically Jun-Aug) and remains in their housing paying rent/utilities, then the costs of rent/utilities for those three months is not tax free for the 529 distribution because it was not paid "in direct support" of the education.
Board - This is the cost of food. Typically most colleges offer a variety of "food plans" for students. If your student will be attending college out of state or several hundred miles from home, more than likely you would be getting the most costly food plan for your student. That plan would feed them three meals a day, 7 days a week. Average cost for a food plan of this type is around $2000 per semester. It usually includes a few extra perks such as $200-$300 in "college bucks" that can be spent at on campus food establishments. This comes in handy when the student may be to busy to go the dining facility, or just wants to "eat in". I know my kids would on occasion use there "college bucks" to order pizza from the on campus pizza hut, and have it delivered to their dorm room.
If the student is living off compus by their own choice, then for the "board" part of room and board your claim can not exceed what it would cost for the student to have purchased the campus meal plan. Now in situations where the college does not have an on campus dining facility and the student has no choice but to feed themselves by other means, then the cost claim for the "board" part of room and board must be reasonable. So no steak and lobster 3 times a day, 7 days a week. The IRS ain't gonna let that fly.
Now, with 529 funds used for room and board, the key phrase here is "in direct support of the education". So if the student continues renting during the summer between the spring and fall semesters and does not attend college during the summer, the room and board paid for those summer months is *not* and allowed expense that can be claimed against 529 distributions.
Finally, be aware that transportation is *NOT* an allowed education expense *no* *matter* *what*.