My spouse and I help out our married daughter by paying for various things that they just don’t have money for, rather than giving them money each month. ex. we paid for the baby’s crib, insurance, etc. We do this from maaser money. We have been paying for my daughter’s graduate school, which she needs in order to work in her field, while supporting her husband who is part learning and part Rebbe. We simply do not have enough to pay for these extras without using maaser money, as we have many younger children living at home still. Are we allowed to use maaser for this, and if so, can we give it directly to the institution, or do we need to give it to her instead? It is a secular college. One additional note, the yeshiva she works for will increase her pay when she finally graduates.
If the couple is eligible to receive tzedakah, and it sounds like they are, you are allowed to pay thier bills and it is as if you gave the money to them. Even though you are giving the money to a secular college, it is not as if you are giving your maaser to a college, but to your child in the form of paying her bills.