Scholarships - Can only be used for the qualified education expenses of tuition, books, and lab fees. That's it.
Grants - Can only be used for the qualified education expenses of tuition, books, and lab fees. If explicitly stated in the grant letter from the grantor, grant funds can be used for other things such as room and board, provided that room and board is in direct support of the education.
529/Coverdell distributions: Can be used for the qualified education expenses of tuition, books, lab fees *AND* room and board, provided the room and board is in direct support of the education. For example, if the student does not enroll for the summer semester and uses 529 funds to pay room & board for that semester, then that's not tax deductible for those 2-3 months.
Out of Pocket Expenses - The only deductible out of pocket expenses are tuition, books, and lab fees. That's it. Nothing else is deductible as an education expense of any type for out of pocket expenses.
