How Your New York Divorce Might Affect Your Child’s College Education
According to the U.S. Department of Education, 74% of children raised in an intact family will attend college as compared to 54% children from divorced families. You might also find it surprising that only 6% of non-custodial parents help their children with a college education. The primary reason for the lack of divorced parents, and especially non-custodial parents, assisting their children with their college education is financial strain and a smaller percentage of parents who feel that they are morally obligated to help their children attend college.
Since the need to attend college to compete in a global economy is strong and job markets are extremely competitive, custodial parents have been seeking the court’s assistance and their state legislature’s help to compel the non-custodial parent to contribute to some portion of the child’s college educational costs. In fact many states, including the following states as well as New York, have enacted laws to do just that:
- Alabama
- Arizona
- Colorado
- Connecticut
- District of Columbia
- Florida
- Georgia
- Hawaii
- Illinois
- Indiana
- Iowa
- Maryland
- Massachusetts
- Mississippi
- Missouri
- Montana
- New Jersey
- North Dakota
- Oregon
- South Carolina
- South Dakota
- Utah
- West Virginia
- Washington
Factors Courts Look at in Making their Decisions
Courts in these states look at a variety of factors when compelling the non-custodial parent to contribute towards their child’s college education including:
- Whether the parents would have paid for college if they had not decided to divorce
- The educational and economic situation of the parents
- Financial aid that may be available
- Other family members who may have set up a scholarship fund or provided for the child’s college education such as grandparents
- The child’s interests, goals and aptitudes
- Relationship between the child and the parent
- Whether the parents entered into a settlement agreement prior to the divorce which covered the costs of college for the children
It may be a good idea to speak with your spouse about the children’s college education and to set up a college fund early in your child’s life so that your children will have the opportunity to attend college if your child choose to do so. This way in case you divorce later, your child’s college education plans will already be in place and you and your spouse will not have to worry about deciding who is going to pay for the education as part of your marital settlement agreement.
New York 529 Program and Pre-Paid Tuition Programs
Under the New York 529 program, you can make a contribution to the account established for meeting qualified higher educational expenses for your designated beneficiary/child. The person who establishes the account is the account owner. The owner can change the beneficiary at any time or use the funds for other purposes besides the beneficiary’s college education. A parent, grandparent or student can be the account owner. However, in order for the withdrawal to be considered a qualified withdrawal under New York 529, it must be used for higher educational purposes. Qualified educational expenses include tuition, fees, books, supplies and equipment relating to student attendance or enrollment along with some room and board expenses during the school year. There are also prepaid tuition programs which allow you to pay the current tuition amount to cover your child’s future tuition costs.