Room and board is not considered an eligible expenses; therefore, the amount of the scholarship (or grant) used for these expenses is considered taxable. This would be taxable income on the student's tax return.
If you claim him as a dependent and you have any excess tuition that scholarships did not cover, you can claim an a tax break for those expenses (assuming you otherwise qualify). However, if he had a "full-ride", then there would be no eligible education expenses and the room and board portion would be taxable. Again, taxable scholarships are reported as income on the recipient's tax return.
