Allocation of College Expenses in Divorce

Saving for education

To the recent high school graduates from the class of 2019, congratulations!  For the parents (particularly divorced or divorcing parents) of the recent high school graduates from the class of 2019, I hope you’ve saved some money.

High school graduates are going off to college at increasingly high rates.  Unfortunately for parents and students, the cost of tuition, room, and board for colleges and universities has skyrocketed within the past decade.  Some schools are now topping out at a whopping $70,000 per year for these costs.  I apologize in advance to our readers who expected a quip about the recent college bribery scandal; as a proud alum of the University of Southern California (was not on the crew team), I will limit this discussion to the publicized retail cost of colleges and universities. Go Trojans!

For family law attorneys, the issue of college costs is invariably at the forefront of our minds when dealing with any case involving children of college age and younger.  Even divorce agreements in which a child is only a toddler will often mention at least some aspirational language regarding the parents’ mutual desire. Such as for little Jimmy to “have the opportunity to attend a college or university in accordance with his interests, aptitudes, and abilities,” without necessarily providing for the allocation of college expenses for each parent at that time.  If a child is in elementary and middle school, then the divorce agreement may include more detail about first applying any existing accounts held for the benefit of the child (e.g., 529 Plan account, “UTMA” account, etc.), scholarships, grants, and other financial aid received by the child towards the college education expenses, without necessarily determining the parental allocation of the remaining costs.  Typically, the actual allocation of college expenses is reserved until the child is in high school, when the issue becomes ripe for review or further litigation.

Parties who are divorcing or seeking to modify a prior divorce judgment (child-related issues remain modifiable) where allocation of college expenses is at issue will need to eventually resolve how much each parent will be responsible to contribute. The issue of allocating college expenses and its interplay with child support may lead to extensive litigation in a modification action over a decade after the original divorce judgment. Given the amount of money that is potentially at stake – upwards of $280,000 post-tax dollars for four years of college expenses – it is understandably a hot button issue.  So how does the Court typically handle this issue?  Well, as is the case with many hot button issues in the divorce context . . . it depends.

One popular school of thought comes from the current Massachusetts Child Support Guidelines, which suggests a cap on each divorcing parent’s college expense contribution at no more than “fifty percent of the undergraduate, in-state resident costs of the University of Massachusetts-Amherst, unless the Court enters written findings that a parent has the ability to pay a higher amount.”  The current annual UMass-Amherst costs is roughly $30,000, so under this approach, each parent would be responsible for up to $15,000 each year, which is still not an insignificant sum.  Under this scenario, if the actual expenses for the child’s selected college or university exceed $30,000, as they often do, then the responsibility for the additional cost will be at the discretion of the parents, other family members, and/or the child.

The Child Support Guidelines, along with its commentary, make clear that the Guidelines were not intended to limit parental contribution to the aforementioned one-half of the in-state residence costs of UMass-Amherst in situations where the parents “are financially able to pay educational expenses using assets or other resources.”  Fortunately and unfortunately, there is no set formula for determining whether parents “are financially able to pay” above the UMass-Amherst costs, so this exception inherently leaves wide discretion for the Court to decide on this issue, with the possibility for unpredictable results.

The Court, attorneys, and parents can take some guidance from existing case law, which suggests that the courts consider the following factors in determining whether college expenses are reasonable to establish the appropriate parental allocation: financial resources of both parents and the child; standard of living the child would have enjoyed if the marriage had not been dissolved; cost of the school; the programs offered at the school; child’s scholastic aptitude; how the school meets the child’s goals; and the benefits the child will receive from attending the school.  None of these factors is dispositive so there is room for interpretation, advocacy, creative solutions, and, in some instances, fierce litigation.

So parents, plan ahead for this issue (as much as possible) and try to save some additional money for that overpriced “Mom” or “Dad” tee-shirt at the campus bookstore during parents’ weekend, you’ve earned it.

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