Education

Everything (as far as taxes goes) is based on what happened in 2024. 

In 2024, you can pay for classes that are in 2024 and/or the first three months of 2025. 

What matters is what was paid. 

The school reports Form 1098-T.

Box 1 is what was paid to the school for tuition and fees. (NOT what was billed)

Box 5 is scholarships that went through the school in the name of the student.

Your 1098-T is saying that the school was paid 34,000 in 2024 and that 54,000 scholarships posted in 2024. 34,000 paid in 2024 could be for classes in 2024 and/or classes for the first three months of 2025. 

This indicates that the student got 20,000 more in scholarships than what was paid to the school in 2024.

We don't talk about student loans or room and board.

Why do you say her school was around 88,000? Box 1 is 34,000.

Are you adding Room and Board? Room and board can offset a 529 distribution (1099-Q) but not scholarships and can't be used towards a credit. 

Why do you say tuition was 66,000? 

You said 

"Box 1 says $34,000. This is the total that we paid for Fall and Spring between cash and her federal student loans ($5500)."

The numbers you give are quite confusing, 
I tend to agree with Amy that perhaps the confusion is that some of the scholarship posted before the school was paid for the 2025 classes?
But you say there was no money left, so unless the school hung onto the scholarship for the next year, that theory doesn't make sense either. 
I suggest you look at the 1098-T and the students school statement. Try to match tuition BILLED with tuition PAID to scholarships that posted. 
Student loans don't really factor in at this point. When school loan payments are made, the interest might be deductible, but that will probably be later. 
Room and Board expenses don't really matter. Using scholarships to pay room and board makes the scholarships taxable income. Only when used for tuition, fees, books and supplies do scholarships not get taxed.
 

The student may have additional education expenses that do offset scholarships but are not listed on Form 1098-T such as books and supplies. TurboTax asks for those additional expenses after you enter Form 1098-T.

IRS Pub 970 is somewhat easy to read and might make things clearer. They have a lot of good examples. 

Also, don't hesitate to ask for a meeting with someone with the school Financial Aid office. They know how these expenses and scholarships work and can explain it a lot better than we can. It's what they're there for. 

If the student received scholarships that were not spent on Tuition, Fees, Books or Supplies, the student will need to claim that amount as income on their federal tax return.