What is correct way to report Scholarship from 1098-T and how does that affect American Opportunity Credit?

I am encountering some scenarios on College Students who received 1098-T with scholarships.

(1) 1098-T shows Box 1 $20K and Box 5 $15,811.  That means net $4,531 have to be paid out of pocket.  The student made $6K in part time income (over the summer) and we were going to file his return to claim back refunds $100-200. But now I am questioning if I should include his 1098-T in his tax returns or his parents?  His parents have low enough income to qualify for AOC $2,500.  The kid live away at school 5 hrs drive from home and his parents provided more than 50% of his support.

(2) College student Soc Sec Income $6K (from her mom's disability and will be last year she receives at age 18), dependent of his parents. Lives 3 hours from parents home at college. 1098-T Box 1 $22,925, Box 5 $12,000.  Does she need to file a tax return?  His parents income was too high to take advantage of AOC. I was not planning to file a return for her if it was just the SS benefits which she has been getting last few years.  

What is taxable scholarship?  Is it when scholarship in Box 5 is > than Payments for tuition Box 1 in Form 1098-T?

Thanks for your help. Appreciate it very much.