I will try to decipher what you are asking and reply using a hypothetical. Let's say that tuition is $10,000, on-campus room and board is $6,000, required books are $500 and the scholarship was used to pay for $3,000 of the $10,000 tuition bill. You could then use $13,500 of 529 money ($7,000 for tuition, $6,000 for room and board and $500 for books) without incurring a penalty or tax on the 529 money, and the $3,000 scholarship money would be tax-free. Does that answer your question?