I take it the parents are claiming the child and claimed an education credit for the taxpayer.  Then you need to enter the student worksheet like what was done on the parents.  Then link the 1099-Q to that worksheet.  On the worksheet you have to designate that $4,000 was used by parent in figuring their AOC.  Then the left over expenses should eliminate the earnings from 1099-Q.  Remember to add room & board to students worksheet.