Hillary Pillary, age 22, is a full-time student at Diploma Mills College and is awarded a master s degree at the end of the current year. Her tuition, fees, books, and supplies are $10,000 for the year. During the year, she received the following payments:

Scholarship for the year $7,000

Loan from college financial aid office $3,000

Cash prize awarded in beauty contest $2,000

Gift from Aunt Sue $1,000

What amount of these payments is taxable to Hillary for the current year?

A. $1,000

B. $2,000

C. $3,000

D. $5,000

E. $13,000