Uncoupling, Kids and Paying for College – Kiplinger’s Personal Finance

Now’s the time of year when high school seniors are getting those much-anticipated letters from colleges. It can be a thrilling time for kids who get a “yes” from their dream schools. It can also be a scary time as students and parents contemplate how to pay for that dream.

If you started planning for your child’s education as soon as he or she was born – or even before – you’re not alone. Aside from their own retirement, it’s likely the biggest expense for which parents will ever save.

Divorce may alter how (and how much) you save for college, but it need not wreck your kid’s college dreams. Like so much involved in divorce, funding college in a fair and equitable way involves advance planning.

Parents who are splitting up have several options to consider, whether their children are in diapers or closer to getting a diploma. Of course, the closer a child is to the pomp and circumstance, the more urgent it is that couples splitting up agree on how to handle paying for college. Here are some scenarios for divorced or divorcing parents to consider.

Both parents agree to a certain rate of monthly savings for tuition

The amount could be a percentage of current income, or it could be a set amount ($250 per month per child, for instance) that both parents agree to set aside for college in an account type of their choosing. You can stipulate that the monthly amount may increase over the years or keep it at the agreed-upon amount for the duration. It’s all about forethought and writing it into your agreement at the time you split.

A third, a third, a third

In this scenario, both parents each agree to pay for a third of a child’s college tuition, room and board with the last third being paid by the child – likely with student loans or scholarships. The child may be too young to understand the arrangement at the time of the parents’ divorce – and doesn’t need to know it until the time comes to talk about the expense of college and the ways families go about paying for it.

‘The UNC provision’

That’s how family lawyers in North Carolina, where I practice, informally refer to this option, which entails parents agreeing to split the cost – at the tuition and room and board rates at the time – of four years at the in-state university system’s flagship campus. But it works the same no matter what state you’re in. The child doesn’t have to attend UNC Chapel Hill (…….

Source: https://www.kiplinger.com/personal-finance/careers/college/604309/uncoupling-kids-and-paying-for-college

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