Yes, if properly structured, she can. That's exactly what we did with one our kids. IRS Publication 970 allows expenses to be paid with borrowed funds. I set up the funding as a loan at a current Applicable Federal Rate and an initial repayment date starting after completing the education. My wife and I then gifted the maximum (I think it was $13,000 per person per year at that time) amount each as payment against the loan balance. This eliminated the loan obligation by the time she graduated.
