Retirement tax questions

My school put my Hazlewood benefits in block 5 along with my grants and loans. Since my Hazlewood benefits are in block 5 is causing and off set when subtracted from box 2 making me have to pay taxes on my scholarship and my grants. Is it normal to pay taxes on grants and scholarships? Should I subtract my Hazlewood benefits from block 5 and put it the veterans benefits section, or keep it in block?