It’s not tax free if it pays for room and board (which my daughter’s did). I agree it was the best ‘job’ she could have had as a 17 year old and allowed her to go to the college of her choice.
There are perks just like the football and basketball players receive - clothing, snacks, shoes, work out times at the gym, activities like community service. My daughter’s boyfriend was also an athlete. I don’t think I ever saw him in clothing that wasn’t given to him by his coach - sweats and jackets and 1000 t-shirts.