On form 1099-Q, instructions to the recipient reads: "Nontaxable distributions from CESAs and QTPs are not required to be reported on your income tax return. You must determine the taxability of any distribution."
It's pretty clear that none of your distribution is taxable, just don't enter the 1099-Q on your return. When the box 1 amount on form 1099-Q is fully covered by expenses, TurboTax will enter nothing about the 1099-Q on the actual tax forms.
"The school has a requirement to live on campus and buy a meal plan, so they included those costs in 1099-Q box 1." That alone covers the distribution, plus the other expenses is more than enough
