I don't know about you, but every year, my scrap paper box gets really full, too full in fact, and eventually I resort to throwing some away so that it doesn't overflow. Last year I came up with a great lesson that uses up lots of the scraps, keeping me from throwing it away. I had my kindergarteners create paper pulp ornaments.
We took the paper and separated it by color, and then ripped the paper into little pieces. Next, we soaked the paper in water overnight, and then ran it through a blender. Once it was pulped, we used cookie cutters as molds to create the ornaments. with the cookie cutters laying on a towel, the students piled the pulp into the middle, forming whatever patterns or designs they wanted. Next, we used sponges to press the pulp together and soak up as much water as we could. After poking a hole in the ornament, we put the still-wet pulp on the heater to dry overnight. You can add peppermint oil to to the pulp before the students use it if you would like. This helps in two ways. The first is obvious, it makes the ornament smell good, the second benefit of this is that it helps retard molding of the wet paper pulp if you need to store if for more than a few days.