It’s college application time across the country and perhaps the only thing that could make it even more anxiety-inducing for children and parents is divorce.
Whether parents are separated, divorcing or already have a divorce decree, the event significantly impacts college planning and what each parent will be required to pay for college tuition, room and board. Beyond any settlements or agreements parents have, total costs for each can be revisited and based on what state law dictates.
In some states, laws limit divorced parents’ obligations to pay for higher education while enforcing divorce agreements, but in more progressive states like New Jersey, the law makes it clear that parents are required to pay for college and trade school.
“New Jersey law clearly provides that a divorced or separated parent’s obligation extends to higher education. Not only is there an obligation to contribute towards college, child support does not end when your child goes off to the dorms. It may change, but it does not end,” said Jennifer Weisberg Millner, an attorney and shareholder in the family law practice of Stark & Stark in New Jersey.
Advisors with divorcing clients should take particular note of this for both financial and legal reasons, especially in light of the fact that some parents who actively encourage their children to apply for expensive schools are being held to higher college payments by some courts, Weisberg Millner said.
Divorce is a time when advisors should deliver a financial reality check to clients, she added. “If your child is not going to qualify for significant financial aid or scholarships, and you can’t afford what you reasonably think may be your share, don’t encourage your child to apply,” Weisberg Millner said. “It can only lead to heartache on the part of your child, and in some cases, a court order that can be financially devastating.”
Recent court decisions prove Weisberg Millner’s point. “Several years ago, I was involved in a case in which the father encouraged his daughter to apply to his alma matter—a small school with a big price tag. She applied, was accepted, and then he realized he could not afford it. The judge held that he had to contribute a portion that was equal to his proportionate share of the combined income of him and his ex-wife regardless of the fact that it was crippling to his finances. The court noted that the father had been involved in encouraging the child to visit and apply to the school,” she said.
Another issue to consider: Is a parent setting a legal precedent with the first child to attend college that will carry over to what they’ll be required to pay for their other children. “Are there brothers and sisters coming up from behind? Prospective obligations for other children are valid issues to consider. Now is the time to manage expectations,” Weisberg Millner said.
If a client does not agree with a spouse regarding what is and what is not affordable, have them spell that out in writing, she said.
“This is not the time to be a shrinking violet, whichever side of the argument you are on. Make your position known, in writing, so you can defend it later,” Weisberg Millner said.