<p>I have a pretty good deal with a Scholarship, but one thing I don't get is that I read they "may be taxable."</p>
<p>Huh? What? So if the school gives me money, the government can take it away? What good is a scholarship if I then need to come up with my own cash to pay the government that equals some percentage of the scholarship money? Doesn't that suck?</p>
<p>Briefly, scholarship money that goes to tuition, fees and books is called "qualified" money. This is tax exempt. If part of your scholarship covers room, board and travel, then that part is taxable, because that is "non-qualified". You can download IRS Publication 970 at <a href="http://www.irs.gov%5B/url%5D">www.irs.gov</a> which explains everything.
So, yeah, on the surface it does suck. But if a school was giving me so much money that I had to pay income tax on part of it, well, that's a whole lot better than having to take out loans that take years to pay off.</p>