This discussion was created from comments split from: National Merit freshman last year. Tax situation..
Hi all! Do most collages apply the scholarship/grant money to tuition and fees first and then room and board? I am assuming they don’t want to hurt the student by having to pay more taxes than needed so it goes to tuition fees first and then any additional goes to room and board since that is optional. Ps… I’m trying not to stress about this 
@Bbates75, I believe so, unless a scholarship is specifically for room and board (MSU has a weird one like that).
Some schools on their billing statements will just list charges broken out by category, and then credits without designating which specific expense is being paid with which credit. In cases like that, it will be up to the student to determine where the dollars are going. There are instances where the student may want scholarship money to go to room and board and therefore be taxable.
This discussion was created from comments split from: scholarship tax/ financial aid.
My daughter had a number of grants and scholarships. Some were ONLY for tuition so the school applied those first. Any funds from the school could only be applied to billed costs, so no ‘refund’ of merit awards or even her athletic award. She could get a refund to use a Pell grant for books and rent when she was living off campus, so the school applied those last. There were 5 items on her bill, tuition/fee/fee/insurance/meal plan, and it took 2 pages to post all the awards and what they paid for. They were very specific.
As a junior, a very nice FA office applied all her non-refundable awards first. As a senior, that very nice FA officer had left and the new one applied the awards in a different order, so daughter got about $1000 less in her refund. Her coach had agreed to pay 100% of costs for her last year but D actually got a lower amount in scholarships for that final year because of the order the awards were applied.
Other daughter’s tuition and fees were added up, the grants subtracted off, she/I paid the difference. Nothing broken out.
University of Denver also has a scholarship that only pays for housing for 2 years. Can’t be used for tuition.