The Pell grant posting of $1,524 to your daughter’s account would have taken the place of an equivalent amount of personal funds (presumably) that you had already paid. The refund would therefore be a return of $1,524 in personal funds (presumably) and would not be taxable. If the $7,000 that you originally paid was from a tax-advantaged source (like a scholarship or a 529 account), it’s a different story. Hopefully that’s not the case, and your only problem is getting your daughter to turn over to you the $1,524 that was refunded to her private checking account.