And there is a huge loophole (to add to Belknap’s fine post)- money paid directly to a college is NOT subject to the gift limit and does not require filing the 709.
BUT IIRC…if the student has another FAFSA to complete after tuition is paid directly to the college on their behalf…that money is on the next FAFSA as “money paid on behalf of the student” or however it’s worded on the FAFSA…and that amount can affect need based aid.
Thumper- that is correct. But in addition to being able to give anyone you want (and for whatever reason) up to 15K per year with no forms to file, you can pay tuition on someone else’s behalf with no limit. And a married couple can give 30K per year!
So there is no issue starting second semester sophomore year (because prior prior rules mentioned above). So the last 5 of the total 8 semesters can be gifted directly to the student or the school with no problems. For the the first 3 semesters, you can go the loan route.