"Out of pocket" and loans do not matter. You have expenses, than you have tax attributes (529 distribution, AOC, scholarship) to allocate those expenses to. It does not matter (except for restricted scholarship) how the "payments" were applied. You are free to allocate for the best tax benefit.
So, first allocate $4000 of tuition to the AOC.
$1400 of the tuition must be allocated to the restricted scholarship.
Everything else goes to the 529 distributions. Yes, you need to know the amount of room & board. Allocate first to the 1st 1099-Q, since it's earnings percentage is higher than the 2nd. My math says the 1st 1099-Q is fully covered. About 80% of the $900 earnings in box 2 of the 2nd 1099-Q will be taxable. The credit/scholarship exception will apply, so there will be not penalty.
Bottom line: The student does not have to file a tax return and neither 1099-Q needs to be reported. His unearned income is less than $1300 (the stipend is earned income. even if it wasn't he's still under $1300).
The only tax reporting you need to do is claim the AOC on your return, with his 1098-T.
