You don't owe taxes on a gift , but grandma might owe a gift tax. Every year anyone can give each person a certain amount of money and doesn't owe a gift tax. I'm not sure, but I think $20,000 is over that amount. If you can, a better way is for you to give back the money and then have grandma pay the student loans off by sending the money to the loan companies themselves. Then she won't owe a gift tax
