Here is another approach to solving the same problem:
1) Find the PV of the four $25,000 that he is withdrawing at the beginning of each year. I assume you know the formula that is used for that. I get a figure of $92,933.25 @ 5% comp.monthly.
2) The above amount is 10 years in the future, so we have to find its PV as of today, using the common PV formula, which I assume you know. By doing that, I get a PV of $56,425.45 @ 5% comp.monthly.
3) Now this number that we just got, $56,425.45, is the important figure for the parents, because they now have the PV of ALL their monthly payments for 13 years or 156 months.
4) Now, we use the annuity formula to find the monthly payment. By doing that, we get a monthly payment of $492.63, which is the same number that Melody calculated.
The only thing that you have to be careful about is the number of years or months that the parents will continue to deposit the money. It is 13 not 14 years, because by the end of the 13th year, they should have saved enough money for their son to be able to withdraw the last payment of $25,000 at the beginning of the 14th year. Good luck to you.