YOU, the Taxpayer claiming the student, use the 1098-T to claim an Education Credit.
If the 1098-T shows that taxable income needs to be claimed, that income is claimed by the student.
TurboTax can handle either scenario. Be sure to list the student as a dependent on your return, and your income first (so the credit will apply to your tax liability first if applicable) then the 1098-T and any 1099-Q attributed to the student.
Be sure to complete the entire education section until you get to the "Maximize My Tax Break" screen.
IRS Pub 970 has some good suggestions and worth the time to look over
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