The program may have used expenses for a credit rather than towards the distribution. This may happen when you click "Maximize My Education Tax Break" if the credit is worth more than the tax the student will need to claim.
Check to see if you are getting an education credit.
Go back to the "Here's Your Education Summary" screen and go back through the "Education Information" interview. On the last screen the program will tell you how much of the expenses it is using for a credit. It may have defaulted to 10,000. The American Opportunity Tax Credit maxes out at 4,000, any more for that credit is a waste, the Lifetime Learners' Credit maxes out with 10,000.
You can change this amount to whatever you wish. If you would rather the distribution not be taxed, adjust this screen accordingly and do not click "Maximize My Education Tax Break".
You can also type letme and click the "Jump to letme" link to see what credits you are eligible for and change the selection if desired.