re: What should these college kids do with the money in their savings/stock account?

I would probably just put $2000 or so into the Vanguard s+p 500 fund to start, and have them contribute 10% a month or so from their paychecks. I would do it in a Roth. If the kids cars aren't going to last another 5 years or so, or if they break down and you would expect them to replace their current vehicle, I'd keep it in cash.