Taxes are complicated.
@Vanessa A said "You may also be losing an education credit which could be worth up to $2,500 and potentially (if you qualify) ".
But you said earlier that "100% of her tuition has been awarded her from the college". Normally that means that you can't claim an education credit because no tuition was paid. But there is a tax “loop hole” available to claim an education credit, for the parents of student-dependents on scholarship. The student reports all her scholarship, up to the amount needed to claim the Education Credit, as income on her return. That way, the parents (or herself, if she is not a dependent) can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship. You cannot do this if the conditions of the grant are that it be used to pay for qualified expenses. Because she is a grad student (medical school) she is not eligible for the $2500 (American Opportunity Credit - AOC) credit, but is eligible for the (up to) $2000 credit (LLC - Lifetime Learning credit). If she completed her undergrad degree, earlier in 2024, she would still be eligible for the AOC, for both grad & undergrad tuition. This gimmick won't work after she turns 24 (taxes are complicated) and is limited, now, if she has other income.
