"I was never asked what each child's education expenses were".
You have to enter the expenses.
In TurboTax (TT), enter at:
Federal Taxes Tab (Personal for H&B version)
Deductions & Credits
-Scroll down to:
--Education
--Education Expenses
"I'm not sure how TurboTax is determining that I received a distribution that is larger than the expenses."
Since you didn't enter any expenses, TT is treating the entire 529 distribution as non qualified.
