Room and Board that is paid with Grants or Scholarships is actually Taxable Income, it is not a Qualified Education Expenses for these purposes, thus it is not deductible.
A scholarship or fellowship grant is tax free only to the extent:
It doesn't exceed your qualified education expenses;
It isn't designated or earmarked for other purposes (such as room and board), and doesn't require (by its terms) that it can't be used for qualified education expenses; and
It doesn't represent payment for teaching, research, or other services required as a condition for receiving the scholarship. For exceptions, see Payment for services, later.
https://www.irs.gov/publications/p970/ch01.html
