I have had people ask me to hold money for them before and always said no. Not only for reasons like you stated, like the IRS or Financial Aid finding out. The people asking for help with such things are usually very shady and up to something. Maybe they are behind on their child support and don’t want it found, or there is a warrant out and they don’t want to be traced. Maybe the money is stolen or illegal. Why on earth would a normal law abiding citizen not be able to open their own savings account? Is there some reason they are afraid to put forth the ID required to do so (such as being an illegal alien?) All the people I knew who asked were shady with a capital S. If his only reason is because he lacks the willpower to not spend it, he can invest in savings bonds or CDs or ask his bank for options similar that require him to wait to take the money out. Chances are though, something shady is going on.
The last guy who asked me had been evading the IRS for 15 years. As soon as he got an account in his name, they took their money back. You don’t want to find yourself complicit in somebody else’s mess, nor do you want the later arguments or accusations if the bank takes out some fees or interest. Let him handle his own business.