5 TIPS ON PLANNING FOR COLLEGE FUNDING AFTER DIVORCE

You have a five-year-old and an eight-year-old and you are separating from your husband.  The last thing on your mind right now is funding college. A word to the wise, proper planning before you finalize a divorce settlement is critical to making these costs as affordable as possible.

“Do we have to pay for our kids’ college education”?  In New York, child support continues until the children are 21 years of age, or possibly earlier if “emancipated” e.g. by working full-time or married.  So, the court may decide that parents should share in paying for the children’s college expenses, although it is not a requirement.

In divorce mediation, we discuss and resolve the issues relating to college funding even if your kids are way younger than 18.  The key focus will be on the family’s budget, and the parties’ needs and interests.  Five key issues to think about relating to college funding and divorce are the following:

1.        Should we agree to pay for any college our child gets accepted to and wishes to attend or should a cap for tuition, room, and board limit be included in our divorce settlement agreement, for example “capped at the cost of an average SUNY school”?

2.        Should the basic child support amount be adjusted in some way during the months the child is in college?

3.        What types of college savings accounts should we think about creating, and which ones may affect eligibility for receiving financial aid from the schools?

4.        For divorced parents, the FAFSA (Free Application for Federal Student Aid) will only look at the financial information for the parent who has primary residential custody for the majority of the year.  As such, it could save money if the parent with lower income is the one with primary residential custody in the year or years leading up to applying to colleges.

5.        The amount of spousal support or maintenance received will count towards that parent’s income for assessing your child’s financial aid needs, if the support recipient is also the parent who has primary residential custody.  Timing of starting or ending these support payments in line with maximizing ability to obtain financial aid is an important topic of discussion.

Bottom line is if you plan early and understand the key issues you can make college more affordable.

  Yes, I am an attorney but I’m not your attorney and this article does not create an attorney-client relationship. This article is legal information and should not be seen as legal advice. You should consult with an attorney and a financial planner regarding your situation before you rely on this information.