Direct tuition payments (and tuition payments alone, NOT payments for other educational expenses such as room and board and meal plans) are not considered taxable gifts. (protective.com)
However, depending on how much money is involved, your beneficiaries can be penalized by the gift tax, although in order to be taxable the gift amount must be quite sizable. (insuranceproviders.com)
Furthermore, under current law, each individual can make up to $ 1 million in total taxable gifts in his or her lifetime before paying gift taxes. (aaii.com)