Evaluating an opportunity for undergrad thesis in computer science
Master's

Someone doing his PhD in Germany typically has a Master's. So, it's not a sign of a failed PhD or something. And you genuinely don't need a PhD to do world-class research, even if it would be a sign you have more experience with a degree.

So, din't worry about the research assistant not having a PhD, rather think if he/she is good in his/her research area. From your question I infer that this particular PhD student is good.

Funding

As for funding, there are two possibilities: the student assistant rates (which are typically around 8/10 Euro/hour for up to 80 hours/month) or a research/teaching assistant position. They are stacked after having/not having a Master's, the typical rates are E12 and E13. You can google the the rate in corresponding federal county ("Bundesland").

An easier way is to look for third-party projects at the website of the professor / his group.



Update:

Rankings

There are multiple university rankings out there. Something like CHE focuses on German universities and splits up based on the major. You might want to look that school up.

Costs of living

A German university imposes a rather small (bureaucratic) fee. It's not the tuition typical for US universities, but rather like 200-250 Euros in a semester, i.e. half a year. It brings a cheaper food in mensa and a bus ticket with it. This would not put a huge dent into your finances, but you'd need to consider it.

However, the costs of renting a flat / a room in a shared flat and medical insurance can be rather high and range from 150 to 500 Euros for living and 80-250 Euro for insurance. You would find rental costs in your typical website for renting (I am actively avoiding ads here). The insurance is probably stated in university's checklist for foreign students.