College Planning And Divorce

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College has become increasingly important in our current times – those without a college degree face job prospects that leave them with significantly less future income. But when parents divorce, paying for college can become quite difficult when paying other support obligations and maintaining two households.

What can parents do to make college feasible in the face of divorce?

First, all parents should take advantage of 529 savings accounts that allow tax-free accumulation of funds devoted to education. Contributions to a 529 could be agreed to by spouses and written into a separation agreement.

Second, all parents should explore options that reduce tuition, either through merit-based scholarships or financial aid. Many schools give merit scholarships based on GPA and ACT scores, so assuring the child scores well on both accounts reduces total college costs. Also, if one parent alone could qualify for financial aid under FAFSA, that parent should make the application and receive the aid.

Third, spouses should discuss prior to divorce how to allocate costs between themselves and the child. Some parents insist the child take out a loan to have a stake in the education as an incentive to excel. Some parents have no choice but insist the child take a loan because they cannot afford college. Discussing this prior to divorce helps families plan.

Fourth, spouses should know that courts will not make a former spouse pay for any college the child wishes to attend and gains admission. Currently, in Missouri courts will not impose on a parent more than the cost of in-state tuition to the University of Missouri, assuming the parent has the ability to pay. And the court will insist the parents apply for financial aid and the child make all efforts to attain scholarships.

Unfortunately, many spouses do not do well planning for college during the marriage; some even use funds that would have gone to college to pay for the divorce. Ideally, the best planning takes place early, soon after the birth of the child, in consultation with a financial consultant.

If you have questions about college expenses and divorce, contact us – we can help.

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