@Vanessa A I had the same reaction, but apparently it's so.
https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/funding/nursecorps-sp-guidance.pdf
"Tax Liability All components of the Nurse Corps Scholarship Program award are taxable."
"Under Section 117 of the Internal Revenue Service Code, scholarship amounts received as
payment for services required as a condition of the scholarship are taxable income." (repeated in Pub 970, although not as clearly worded)
