One of the most difficult challenges families face is paying for college. Although it is wise to save for college in a 529 Plan or other type of financial investment, not many families find that they are able to contribute much to these accounts while paying for the rest of life’s daily expenses. This becomes even more challenging when couples are getting divorced as it costs more to support two households than one.
Courts cannot force divorcing parents to contribute to college
Under New Hampshire law, the Court cannot force parents to pay for their adult children’s college expenses unless the parents have agreed to fund their children’s college expenses or set aside assets intended to pay for their children’s college expenses. Even though the Court cannot order parents to pay for college, that does not make those expenses go away, however! The reality is that even though it may not be Court ordered, parents still need to face the difficult discussions and decisions about helping to fund their children’s educations as all schools rely on the FAFSA form to determine the family’s ability to contribute to college.
The FAFSA form or the Free Application for Federal Student Aid is initially completed during a child’s senior year of high school. Although the form has been simplified, it continues to be used by schools to determine the amount of money a family is expected to pay toward college. Although in prior years, the formula looked at the custodial parent’s income and assets, under recently changed rules, the formula will look at the parent who provides the most financial assistance to the child instead. Although it can be clear who provides the most support in some case, in other cases, it may be difficult to determine.
Who Will Pay the “Expected Family Contribution” after divorce?
The challenge for divorcing couples is how to pay for college, knowing there is going to be an expected family contribution. There are many factors to consider including the income and resources of each parent, who provides the most financial assistance to the child, the timing of divorce versus the start of college, and whether there are assets that can be applied as the family contribution. In a court-based divorce, it is not likely that the parents will have any real productive discussions about these difficult decisions. In a Collaborative Divorce process, the parents will have the benefit of their legal counsel and a financial neutral to assist them in navigating these discussions and decisions. The Collaborative Divorce process enables parents to think about making decisions that will benefit the whole family, not just the benefit to him or herself.
This is just one of many reasons that a Collaborative Divorce process makes sense. It provides the necessary resources, guidance, support and flexibility to enable parents to discuss and consider all of the factors before deciding the best way to handle paying for college.
If you are considering divorce, talk to one of our Collaborative Divorce New Hampshire professionals to see if a Collaborative Divorce is right for you.
Catherine McKay is a NH attorney in Londonderry, NH.
Jill Boynton is a Certified Financial Planner and Certified Divorce Financial Analyst in Portsmouth, NH.