Form 1098-T Decreased my Federal Refund Estimate by >$2,000

[Agile]

Federal refund estimate thus far is $3,916. I added my university 1098-T info and my federal refund estimate went down to $1,900... How is this possible, and since I was not obligated to add this info (or am I?!), why would the government lose the chance to make an extra $2,000? Is this a bug in TurboTax? 

[SabrinaD2]

When you added your 1098-T info, your federal refund likely decreased because the scholarships and grants (Box 5) on the form exceeded your tuition payments (Box 1). This excess amount is considered taxable income, which increases your tax liability and reduces your refund

• You should report the 1098-T to claim education credits or deductions. Additionally, schools also submit the 1098-T to the IRS .  Thus, reporting the information on your return helps  to ensure that the information on your tax return matches IRS records, avoiding discrepancies
• This is not likely a bug in the software, as TurboTax is designed to calculate your eligibility for education credits and deductions based on what was entered from the 1098-T and adjusts your refund accordingly

For more details, you can check out TurboTax's guide on the 1098-T form and how it impacts your refund.

[Agile]

Thank you for the swift response. That makes sense.