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At many state-supported schools, room and board can equal or exceed tuition, particularly for in-state students, so it may make more sense to utilize the scholarship for R&B. However, note the following.
If the AROTC scholarship is used for tuition, it is not considered taxable income by the IRS.
If the AROTC scholarship is used instead for room and board, it probably will be considered taxable income. (verify that with your accountant - I am not offering tax advice).
If the school provides all or a portion of room and board as a supplement to the AROTC scholarship (which has been used for tuition), the R&B portion is considered taxable income.
Next Lesson: DIY and DIWY (Doing it Wrong Yourself)
I'm not an accountant but I can confirm it. Any scholarship money, regardless of the scholarship source, that is used for room and board is treated by the feds as taxable income. This is true for "free" room and board as well. Still, I'd rather pay a percentage of that amount of money to the feds than the whole thing to the college.