"She's not comfortable doing that."
You don't need her to that. Technically she does not need to file a tax return (income less than $14,600). So you just do what you need to do on your return.
But, you may want to file just to document the reporting of the scholarship income (I wouldn't because of the small amount).
If you're not comfortable doing that, you can enter the 1099-Q. The proper place is the 1099-Q interview. But you don't just get to enter the $238, you calculated, as income. After that interview, TT requires you to then enter the student's information at the 1098-T Educational expenses section, so it can calculate the taxable amount and claim the scholarship penalty exception.
There a couple of workarounds if you run into a problem. The one you suggested is the simplest one: Other Less Common Income > Miscellaneous and Other Reportable Income. For description use: Qual State Tuition Prgm from 1099-Q. That puts it on line 8z of schedule 1. But that won't produce form 5329 to claim the penalty exception. I don't know if that will be a problem.
The other workaround: Enter the 1099-Q. When asked who the student is answer: someone else not listed here (lying to TurboTax to get it to do what you want does not constitute lying to the IRS). Enter the student's name when asked. A few screens later, you'll get one simple screen to enter expenses. Press Done at the 1099-Q summary screen, to get there. Also enter the amount of the scholarship in the box "Tax-free assistance". This reports the earnings as taxable and claims the scholarship exception. You do not have to deal with the complicated “Educational expenses and Scholarships” (1098-T) section later. TT will prepare form 5329 to claim the penalty exception.
