<p>Scholarships and grants (including waivers) that are over the amount of tuition/fees/required books are taxable income to the student. If the student’s total income, including the taxable portion of scholarships/grants, is high enough to where they are required to file a tax return then they have to file a tax return and pay taxes. The filing cut off for a dependent student (that is claimed on someone elses tax return) for 2009 is $5700 (as long as there is no unearned income, that can change the cut off). If the student has no unearned income (taxable scholarships are considered earned income for this purpose) and their total income is below the cut off then they do not have to file a return, and do not owe taxes.</p>
<p>The tuition waiver would not be taxable income. The room and board waiver is taxable income, *but *it sounds like she does not have enough taxable income to actually owe any taxes.</p>