C.D.
This is ridiculous. I know they mean well. But no. The road to hell is paved with good intentions.
My sister did this with all four of her kids and even though they got good grades they learned nothing. Except of course that everything they do should have a monotary reward attached to it. IMO it ruined their chacter. They don't think of anything or anyone for the most part accept for what they can get either free or for very little.
Schooling/learning should be approached with an attitude of learning and educating one's self for the betterment of self and others.
If they want to help let them start an account for them for college without telling the children right now.
And what happens if next year they can't afford to pay for grades or the year after that?
I'd tell them no, absolutely not and I just might ask them where their ethics are.
That is my basic take on it. And good for you for not doing this, so many do. Have you ever read the book, Punished By Rewards.