She does not need to file a tax return for the state where the college is located, unless she made money in that state. Depending in what the two states are, maybe not even then (reciprocity may apply).
In the dependent interview, in the personal info section, you will be asked if she made money in another state. If you answer yes, and identify the state, TurboTax will later ask you to buy the 2nd state program, and prepare the 2nd state return. She must also report the 2nd state income on her home state return, but the home state will give her a credit, or partial credit for the income tax paid to the work state. Prepare the work state return before preparing the resident state return.
Note: any taxable scholarship is only taxable by the home state, not the college state.
