The answer is not clear cut and you're no going to find any conclusive IRS guidance.
@KrisD15 said " but since the business paid some, it would be 'Other Income'." It can be reported that way and that is better than Schedule C.
Even though that amount was not paid directly by the school. I think you can (and should) treat it as an education stipend. Enter the same way you did the school's payment (as additional scholarship, in the education section).
"Other income" is treated as unearned income.
Scholarships are a hybrid between earned and unearned income. It is earned income for purposes of the $14,600 filing requirement (2024) and the dependent standard deduction calculation (earned income + $450). It is not earned income for the kiddie tax and other purposes (e.g. EIC). For grad students and post grad fellows, scholarship, stipend and fellowship income is earned income ("compensation") for IRA contributions.
Taxable scholarship goes on line 8r of Schedule 1, from which TT treats it as hybrid income.
