Paying for college for divorcing parents

Paying for college can be quite a challenge for divorced parents. Yet those who have settled their divorce via mediation or collaborative divorce, might actually have an advantage in this area.

How?

Many couples—divorced and otherwise—have different ideas on whether to and how much to contribute to a child’s college education. Some think their child shouldn’t have to pay anything. Other parents want their child to have some skin in the game and pay for a little, half or even all. Often these different ideas are not addressed until a child is ready to start college.

Mediation and collaborative divorce puts college planning on the front burner, even if your children are years away from attending college. If a divorce goes to trial, the results can be quite different.

At trial, the judge will not rule on how to pay for college unless the children are actually applying to or entering college. With the escalating costs of a college education, that can be too late for many families. If you want to send your children to the school of their choice, particularly if it’s a private institution, advance planning (and saving) is critical. With mediation and collaborative divorce, coming up with a college savings plan and/or a formula for sharing college tuition payments can be part of the negotiation no matter what the age of the children and no matter how the parents approach the issue of contributing to college expenses.

This can be beneficial to both parties for a number of reasons. The most obvious is payment. As part of the mediation or collaborative divorce, both parties will understand their responsibilities upon the finalization of the divorce. Often most agreements on paying for college are done by percentage: for example, one parent pays 60 percent and the other pays 40 percent; or each parent pays 50 percent; or each parent and the child pays one third. Another common approach has the child taking out the maximum Stafford Loans and the parents dividing the remaining tuition.

If the children are young enough, using mediation and collaborative divorce, the parents can also agree to put a college savings plan in place. Even if a savings plan is not required by a divorce agreement, a parent who knows what his or her share of college expenses will be has an incentive to create a savings plan.

The other benefit to planning for college expenses in mediation or collaborative divorce is that it forces parents to look at what schools are realistic for their budgets. This can help temper their child’s expectations as they are selecting and applying to colleges. Parents can advise their child to have a safety school in mind and realize that it is a strong possibility that money will dictate which college they will attend.

One thing I try to remind my clients is that even with mediation and collaborative divorce a formula and payment plan can only go so far. The critical factor for paying for college will only be put in place when the parents and child decide which college the child will attend. A parent may have committed to paying 50 percent of a child’s tuition, room and board. But if the child attends Salem State University this will mean $10,000.00 per year, if the child attends University of Massachusetts at Amherst, this will mean $12,000.00 per year and if the child attends Middlebury this will mean $30,000.00 per year.

Despite the uncertainty, however, most divorcing couples prefer to make these decisions on their own with their own children and finances in mind, rather than having a judge decide in probate court. Ultimately, if you want your child to have an opportunity at a college education, you work with your spouse to make that happen. And that’s where mediation or collaborative divorce can help parents come to the same page.
When a couple divorces, it is more than simply ending a marriage. It alters the course of destiny to a certain degree for both parents and their children. Through mediation or collaborative divorce, you work with experienced professionals who can help you plan your children’s destiny until they reach college age.

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