For many couples, financial matters are difficult to address during a divorce. They can be complex – and this is even more true for couples who have children. Most parents want to support their children as much as possible throughout their lives – and to plan and provide for their future, too. This often includes the matter of paying for college.
Attending college is often one of the most important stepping stones in the life of a young adult, and this is true regardless of whether parents are married or divorced. As a result, many parents wonder about college expenses following a divorce. Will one parent be solely responsible for paying? Will tuition costs be shared? What about other college-related expenses? Is there a legal obligation to pay? These are all reasonable and important questions to ask.
A Brief Look at North Carolina Law
As with so many issues that arise during a divorce, when it comes to the issue of paying for college, different states have different laws. In some states, courts can and do order parents to pay for college expenses following a divorce. In North Carolina, however, a parent’s legal obligation to support a child ends when the child has turned 18 and has graduated from high school. This means that parents aren’t legally required to pay for college tuition. A judge can’t order it, and one parent can’t demand it of the other. Nevertheless, the truth is that many parents do want to support their children through college.
The good news is that couples can work together to address these issues if they can cooperate and communicate effectively outside of a courtroom through mediation, collaborative law, or other similar options. If both parents agree that paying for college is important to them, they can provide for that in the separation agreement that they create to address the various issues that must be resolved during a divorce. After a separation agreement is negotiated, drafted, and signed by the parties, it can be sent to the court for approval and memorialized as a consent order. At that time, it is binding upon all parties until and unless they later choose to modify it.
If you choose to address the payment of college expenses as part of your separation agreement, there are a variety of factors you may want to consider. Let’s take a closer look at a few.
Addressing Expenses in an Agreement
As parents begin the process of attempting to resolve the matter of how they might provide for a college education following a divorce, it’s important to keep in mind that college costs are difficult to predict. Recently, they have been rising steeply and often – and it’s unknown how long or at what rate that trend might continue. As a result, if your children are very young, it may be difficult to realistically project what their college expenses may be. Additionally, when children are young, the path they may want to take is more uncertain. For some children, college ultimately isn’t a good fit, and instead, they choose a trade school, the military, or a career that they can launch immediately after high school.
For any number of reasons, parents will want to thoroughly think through a variety of factors as they create an agreement about paying for college. Ideally, parents will be able to find solutions that work well for the entire family, with the help of attorneys, mediators, and other qualified professionals.
Some factors that parents may want to consider in drafting their agreement include:
- The financial resources of both parties;
- The age of the children;
- Necessary expenses for which each parent is responsible in addition to college expenses;
- Whether the parents will pay for additional expenses beyond tuition (room, board, books, etc.), and if so, who will pay for those expenditures;
- The educational goals and interests of the child(ren) involved;
- Any contributions from outside sources (grandparents, trust funds, state-funded contributions, scholarships, etc.);
- Any other factors pertinent to your unique situation.
In addition to the tuition for college itself, there are, of course, other expenses that parents must plan for. These expenses include things like books, room and board, gas, travel, study abroad, and more. While it is, of course, impossible to completely predict these costs, considering them and trying to plan is important.
Parents may also want to consider placing academic or other performance-based restrictions in place. In other cases, parents may choose to agree to a certain monetary amount or a predetermined number of years that they will pay. This can help parents with planning and budgeting. It also helps the student to have a clear understanding of parental expectations – that college will not be paid for indefinitely, and that changing majors repeatedly, or taking less than a normal courseload are not options if they want to continue to have their education paid for by their parents.
In other circumstances, parents may choose to set restrictions based on the average cost for the particular degree that their child will be seeking – and there can be many considerations that come into play. Will the child be seeking a technical degree? A trade school education? A traditional four-year degree? A post-graduate education? Each of these will obviously require a different measure of financial planning and preparation. Parents may also want to consider whether they will provide the same amount of support to each child, regardless of whether they pursue different degree paths, or whether the support provided will be dependent upon each child’s unique circumstances and needs.
Thinking Through Various Sources of Funding
- 529 Plans: Many parents begin funding a college savings account, like a 529 plan, when their children are young. Making monthly or yearly contributions that are invested and grow over time can be quite helpful in relieving financial stress and feeling more prepared when the time to begin paying for college finally arrives. Each state has its own version of a 529 plan and depending upon the state in which you live, there may be various benefits to using your particular state’s plan – although it is not required. There are also a variety of other 529 options available that are not run by a particular state. Consulting with a financial advisor and doing research to choose the best plan for your family is always advised.
- Trust Funds: In other circumstances, parents choose to set up a trust account for their child(ren). Both parents make regular contributions and specify certain conditions of the administration of the trust. Often, for example, parents provide that money from the trust will only be paid out on certain conditions – when the child turns 18 or is admitted to college, for example. Setting up a trust can be complicated, depending upon the circumstances, and the various conditions parents want to impose. As a result, consulting with attorneys, financial advisors, and other professionals, as needed, is always advised.
- Family members: In some cases, students are fortunate to have extended family members who want to help by contributing to the payment of college expenses. In these cases, the extended family members may want to give the money to the parent responsible for paying in a lump sum, or they may want to pay the college directly. In still other circumstances, the extended family members may want to create their own 529 plans or trust accounts. There are a variety of payment options available, and ultimately, each family will choose what works best for their unique circumstances.
As you attempt to create a financial plan for college, consider all sources of support. This means not only your assets, but also your regular expenses, and whether support may be provided from any other source – including family contributions, scholarships, or student loans, for example.
Ultimately, when it comes to children’s college educations, parents will make a variety of choices. Certainly, those choices are dependent not only upon the needs and goals of the children, but also upon the circumstances of the parents, and their financial situation. Some parents will choose to pay for a complete college education, while other parents can only pay a portion. Some parents will set certain standards and conditions, while others will decide not to.
Ultimately, there is no “right” or “wrong” decision on this issue. The best thing parents can do is work together cooperatively, with the shared goal of doing what is best for their children. At The Law Office of Dustin McCrary, we’re here to help.
DUSTIN MCCRARY – HERE FOR YOU
After a divorce, you may no longer be a family under one roof – but you’ll always be a family. And you’ll still want to focus on your family’s future, and do the best you can to provide for those you love. At The Law Office of Dustin McCrary, we understand that completely. We understand how it can feel overwhelming to begin to navigate that path. That’s why we’re here to provide the guidance and direction you need. Divorce is all we do – and we’re passionate about helping every client move forward toward a brighter chapter ahead. If you’re ready to get started, give us a call today. We look forward to speaking with you soon.