@KrisD15 said: "The student can't "Just Decide" to claim the scholarships as income. The funds must be allocated to SOMETHING related to education, whether taxable or not".
Yes, he can, as long as the conditions of the grant don't require the scholarship be used for tuition and other qualified expenses (books and fees).
From the 2019 form 1040 instructions (pg 95): “You may be able to increase an education credit if the student chooses to include all or part of a Pell grant or certain other scholarships or fellowships in income. For more information, see Pub. 970, the instructions for Form 1040, line 18c, and IRS.gov/EdCredit. Page 16 of PUB 970 (2019) actually has examples of how to do the “loop hole”.
