It sounds like targeting more schools, especially a few with “full ride” or “full tuition” reputations, would be a good idea.
I believe that your mother could cash in the bonds with her and your son’s name on them with no impact on him - he would not have to be present or involved, but she would treat it as income at her high tax rate (pay the college or pay the tax man?).
She would cash in all of the ones you need to cash in, but again, subject to whatever tax she would have to pay on them. I do not think either you or your son would have to report anything at all, contrary to what you would need to report before they are cashed in (because either your mother or you or your son could cash them in up until they are cashed in).
https://www.treasurydirect.gov/forms/sav0022.pdf
My understanding is that the OR part is important, and lets either party cash the bond in, and it is not really “50-50” after it is cashed in.
Make sure grandma is on board with helping out, and have her pay tuition directly for him, that way it is not subject to gift tax at least.
(yes, horror stories of a parent being on the kid’s bonds and cashing them in unbeknowst to the kid)
Whose SSN is on each bond?
Great links rhandco. From the first link:
“If you use the bond money to pay certain qualifying educational expenses, you may not have to pay federal income tax on the interest.”
^^However, note the following from my link, above:
Who Can Cash In Bonds Tax Free?
You may be able to cash in qualified U.S. savings bonds without having to include in your income some or all of the interest earned on the bonds if you meet the following conditions.
You pay qualified education expenses for yourself, your spouse, or a dependent for whom you claim an exemption on your return.
Your modified adjusted gross income (MAGI) is less than the amount specified for your filing status.
Your filing status is not married filing separately.
Qualified U.S. savings bonds.
A qualified U.S. savings bond is a series EE bond issued after 1989 or a series I bond. The bond must be issued either in your name (as the sole owner) or in the name of both you and your spouse (as co-owners).
The owner must be at least 24 years old before the bond’s issue date. The issue date is printed on the front of the savings bond.
Can the bonds be rolled over to a 529 plan?
Not without cashing them in, paying tax on the interest and then depositing the cash into a 529. These are pre-1990 bonds thus do not qualify for the interest exclusion reportable on Form 8815.