Ignore the question of the law. There are other moral dilemmas at play. Grandpa gave your husband that money to use for school. If he no longer wants to go to school he should call grandpa and tell him so and give the money back. If grandpa then refuses the money and says spend it on what you like then you are clear. If grandpa wants it back then you give it back because it was never really your to do whatever you want with.