July 1, 2007
Written by Staff at The Centre for Mediation & Dispute Resolution
Children’s Post-Secondary Education: To Fund Or Not To Fund
Come the spring of every year, we at the Centre for Mediation and Dispute Resolution (CMDR), find ourselves overwhelmed with inquiries pertaining to funding of children’s post-secondary education. These are not current clients; these are not former clients; these individuals are new to CMDR. Their dilemma is, however, commonplace. They are parents of high school seniors, entering college in the fall. To complicate matters, either they have no idea of how to fund their children’s schooling or, more likely, they disagree on how and what each parent’s liability is or should be. Typically, they are divorced and have separation agreements that omit reference to college funding or contain vague or inexplicit references to education. The following examples may help:
“We, as parents, want our children to have the best education available to him and her in keeping with his /her needs, wants, and abilities. Funding will be apportioned in keeping with each party’s ability to pay.”
“We agree to fund our children’s education in keeping with each parent’s financial status.”
“We agree to help our children reach their goal of achieving a college education. We will each contribute according to our ability to do so after the children have exhausted financial aid opportunities.”
None of these examples is specific about:
Whether there are any cost limitations on children’s schooling (e.g., state school)?
What information determines a parent’s financial ability to pay or his/her financial status?
What is precisely expected from the child? (Is the child to secure loans in his/her name?) Or does a financial aid opportunity constitute a non-reimbursable grant of some kind?
When are decisions on parental contributions to be made (e.g., in the child’s junior year in college? September, before the child goes to school?)
And so the salient question remains: How is the child’s education to be funded and by whom?
It is understandable that, at the time of separation, couples have so many decisions to make that the idea of dealing with their children’s college education is not even on the radar screen, especially if the children are young. Who knows what life will be like in five years, ten years, or eighteen years? Undeniably life changes overtime. But, so, too, may a couple’s ability to reach agreement. New relationships, to mention the major interference, affect each party’s ability to negotiate as a solo individual and in particular, as a parent. Sometimes there are more children involved, whether more of one’s own or his/her partner’s. Whatever the circumstances, they are not the same as at the time of divorce. In some instances it may actually be easier to negotiate post-divorce. The anger may have dissipated; the hurt may be gone or at least muted.
Regardless of when you determine an agreement for college education, we suggest that being specific and thoughtful is to your advantage and to the child’s.
Consider the following:
What price college are you willing to fund? (State? Ivy league cost? Middle priced institution?)
How will you determine each parent’s ability to pay? Are you going to look at income? At income and expenses? At the household, including contributions from others?
Is the child required to contribute? If so, how? By loans? By work?
Are there requirements attached to your provision of funds? For example, does the child need to be a full-time student with a passing grade point average? To complete a baccalaureate degree in four years from high school graduation?
How will you provide funding?
What happens if there is a change in either of your financial circumstances during the funding period? Do you renegotiate?
And the list of questions goes on and on. The important point is that there needs to be a list of questions to be asked and answered. The child needs to understand what you plan to provide for him or her in order to realistically evaluate the selection of schools. The child needs to know what you expect from him or her, both financially and academically. All family members need to know “the deal” and buy into it.
At CMDR, we believe that careful planning helps to allay future concerns and lays the groundwork for the well-being of all family members.
Please Call Our Office For Answers To Your Questions – 781.239.1600