Is it okay to typeset someone’s to-be-graded assignment for them? I have a friend who’s an undergraduate at university. I believe myself to be fairly proficient in TeX/LaTeX; I’ve seen some of the assignments that he’s received back, and we both agree they could look more professional.

Is it ethical for me to typeset his work to look more like a paper before it's submitted for grading? I would not be adding any new information to the assignment and I would not correct any mistakes that I think I see, but it still seems to me that perhaps it could be against the rules.
I think that the best favour you can do to your friend is to teach him how to use LaTeX, so that he can improve the look of his work by himself.

In this way, you won't go against any rule and you'll teach your friend a new skill.