A. A refund on room and board is not a reduction in educational expenses, that does not need to be entered.
B. It sounds like room and board will become a zero, as in no expense paid due to refund. It would not become income.
You are working very hard to do this right. The IRS understands the way payments can straddle years. The refunds have never been an issue before nationwide. The IRS may end up in a court case and decide it isn't included. It is not considered income since after tax dollars were used for most people.
This is where your refund may be taxable as a 1099-Q distribution. It would not be double taxed.
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