WHAT EVERY DIVORCING PARENT SHOULD KNOW ABOUT THIER CHILD'S TUITION-PART II

This post is part of a three part series addressing how divorcing parents might address higher education costs.  Yesterday, we addressed the question:   “How long is a parent required to pay support?”   Today, we’ll consider whether divorcing parents should agree to share the costs of their children’s college. The laws in the states where I practice do not require parents to pay college costs, but parents can agree in their divorce agreement to share in the costs.   Consider several questions before entering into an agreement.

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  • Enforcement of agreement.  How is this provision to share educational costs going to be enforced if one parent fails to make a payment?   Will it be possible for the child to sue one parent to require payment?   Some children have sued their parents for failure to pay educational expenses.  Do you want to create an agreement that might encourage litigation?
  • Capping the amount: selecting a school and program  How much are you agreeing to pay?  How long will make payments? Are you agreeing to pay for a PHD from an Ivy League school?   An undergraduate degree from an in-state school?  A two year degree? 
  • Capping the amount:  housing, food and travel costs.  What are you including in the agreement?  Are you going to pay for the student to live in student housing or a luxury apartment?  Dorm food or fine dining?  Spring break trips?  Summers abroad?
  • Encouraging financial responsibility.  What goals are you setting for your child who is attending college?  Do you want to encourage your child to learn financial management?  How will the structure of your agreement encourage your child to learn to live within a budget?
  • Encouraging academic success.  Does the agreement encourages your child to be a good student?  Will covering all costs remove incentives to complete a program efficiently?  Are you going to agree to pay all costs if your child earns 1.0 GPA or seems to focus on socializing?  Are you expecting your child to attend a university full time for four years? 
  • Other ways to pay educational costs.  How old is your child?  Could some of these objectives be achieved by the parents creating savings or 529 accounts and moving marital assets into those accounts?   Could your objectives be achieved by agreeing to make contributions into those accounts and limiting the ability to withdraw funds from the accounts.

 You should always work with your attorney to draft language that will be best for your family.  These two paragraphs are examples of those I’ve seen included in some agreements.

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  • When the parents want to agree to pay for college expenses"Educational support beyond age 18:  The parents agree that they will each be responsible for ½ of the child’s higher education expenses including tuition, books and fees, and room and board for a period of four years so long as:  (1)  The costs do not exceed the cost for a in-state student living on campus, (2)  The child is in a full time program making substantial progress in obtaining an undergraduate degree at a fully certified college or university in the United States; (3)  The child receives a GPA of at least 3.0 in the first semester of college and maintains the 3.0 GPA during the duration of his or studies; (4)  No college or university takes any disciplinary action against the child.  This agreement is solely between the parents who are parties to the agreement and notwithstanding any provision to the contrary, it may only be enforced by one of the parents. The child, as the beneficiary, may not seek to enforce this agreement.  This paragraph is subject to judicial modification by either parent upon a demonstration that the parent has experienced a substantial change in circumstances since entering this agreement which impacts their ability to contribute to the higher education expenses."
  • When the parents want to agree to save for college expense:  "The parties agree that they will each contribute the sum of $100 per month into the 529 account established by the parents.  The child may withdraw sums from that account in accord with the terms of the account and subject to the approval of both parents.  In the event that the child does not withdraw all amounts by the age of twenty five, the account shall be dissolved and the parents shall equally divide the amounts in that account, after any penalty has been paid.  The child, as the beneficiary, may not seek to enforce this agreement.  This paragraph is subject to judicial modification by either parent upon a demonstration that the parent has experienced a substantial change in circumstances since entering this agreement which impacts their ability to contribute to the higher education savings account."

Today's tip:  Be sure that you fully understand the risks and benefits before agreeing to pay future education expenses for your children.  Contact us if you would like to learn more about using collaborative divorce or mediation to help develop the best plan to meet your child's educational needs after divorce.