My total income amount includes the scholarship amount from my 1098-T. This is raining my taxable income by $37714. IS this correct?

Income from scholarship should be the scholarship amount minus your qualified education expenses (tuition and books for the American Opportunity Credit). 

Scholarships that pay for qualified educational expenses (QEE - tuition, fees, books and other course materials) is tax free.  Scholarship amounts that exceed QEE is taxable income, on the student’s tax return. Room and board are not QEE. 

If box 5 of the 1098-T exceeds box 1, TurboTax (TT) will treat the difference as taxable income, unless you enter additional QEE at books and other expenses.  If the student (or his parents) claim the tuition credit, TT will reduce the QEE by the amount needed to claim the credit. 

"Full ride" scholarships are always partially taxable. 

For more specific advice, provide more details.