Form 1098-T Confusion: Reporting $6,725 Tuition vs $3,748 Aid When I Paid Nothing Out of Pocket

I received a 1098-T form from my university but I'm confused about how to report it. The form shows Box 1 (Payments received for tuition and related expenses) with $6,725 and Box 5 (Scholarships/grants) with $3,748. I got full financial aid and didn't pay anything out of pocket for tuition, but these numbers don't seem to reflect that. I'm in the middle of trying to do my taxes (about 1 hour and 55 minutes in so far), and I'm stuck on this form. The software is asking me to enter these values, and I've put in the $6,725 for Box 1 and $3,748 for Box 5. Box 4 (Adjustments made for prior year) and Box 6 (Adjustments to scholarships/grants) are both empty on my form. The difference between Box 1 and Box 5 is $2,977, but I didn't actually pay anything myself as all my tuition was covered by financial aid. I'm not sure why the numbers don't match up completely. Do I even need to report this on my taxes since I didn't actually pay anything myself? Or is this difference of $2,977 something I need to report as income? I'm really confused about how to handle this.