I would def. talk to the folks because for all you know that 10K can throw in a different tax bracket and now in the end you are not saving 1K on the bill, you might actually be paying more in the long run due to the taxes they had to pay on all of their earnings.
I.E. a 3% jump doesn't seem a lot overall, but if their adjusted income is even 75K that is 2250 more owed because you took the 10K for R&B and not for tuition. Making it 1250 in the whole for them financially.
OBTW, I don't know where the tax cut off are off the top of my head, so no correcting me regarding where the line is, I just pulled a number out to to illustrate mathematically how it does matter for some.
At the very least it is still not truly going to be 10K since it is taxable.
Off topic, EDelhanty, can they do that because I wonder if that impacts the tax credit/deductions for college regarding his folks? I don't know, I am sure somebody else does. It would just seem to me that our college sends us a yrly statement saying how much we paid, now if he pays it than who gets to claim the college deduction aka credit on taxes? They are paying the tuition portion, and he is paying the R &B portion. Will admit I never looked close enough to see if the credits are for just tuition, and in that case I guess my question is moot. Plus, I do Turbo tax and just input where they tell me to input.