To report it as scholarship, don't enter in the income section. Instead enter at educational expenses & scholarships.
Federal Taxes Tab (Personal for H&B version)
Deductions & Credits
-Scroll down to:
--Education
--Education Expenses and Scholarships
After answering no to having a 1098-T, answer yes to qualifying for an exception (that gets you to the entry screens). You'll have to go thru the whole education interview to get to the scholarship screen. At the scholarship screen, enter the amount of the grant. When asked if any was used for room and board, answer yes. Then enter the amount you want to be taxable (all of it), in the pop up box.
From what you describe, line 1h of form1040, would also not be incorrect.
