If scholarships/grants are more then the qualified tuition/fees, the excess scholarship/grants are taxable on the STUDENT's return.

IF the scholarships/grants are allowed to be used for non-tuition (for example, Pell Grants allow that), that it is an option to intentionally make $2000-$4000 MORE of the scholarships/grants taxable on the student's return.  Doing that will allow that $2000-$4000 to be applied for the American Opportunity Credit on the parents' return (if all other qualifications are met).

The 'warning' about doing that is if the student has other income, that could make some (or all) of the taxable scholarships subject to Kiddie Tax.