Employee tuition waiver for graduate studies taxable?

I received a full-time employee tuition waiver for my graduate studies at my college. The full amount of the waiver is shown in box 5 of the 1098-T. TurboTax reduces my returns when I enter this information. Shouldn't this waiver be tax-free since it's under the $5250 threshold for I.R.C. § 127(a)?  What should I do?