What You Should Consider When Mediating College Expenses

{4:00 minutes to read} Certain children’s expenses must be paid in addition to child support, according to the child support statute: medical insurance premiums, unreimbursed medical expenses and child care expenses. These are mandatory add-ons.

Then, there are expenses that may be ordered at or in the Court’s discretion, including post-secondary educational expenses. The Court will consider the parties’ circumstances and what is in the best interest of the child at the time the child would be entering college.

Because it’s not a mandatory add-on, clients may think it’s not necessary to discuss college costs, but that could leave a very big issue undecided and subject to future dispute. So, while you are in the process of addressing a myriad of terms while mediating your divorce, it makes sense to include a discussion about college.

Below are some items you should consider before you begin to discuss this issue in mediation.

Should there be a parental contribution at all?

If at all possible, a decision on this question should not be left open-ended. Doing that can result in a possible dispute in the future, so be as detailed as you possibly can. You can:

• Provide for a monthly or yearly contribution to a 529 Plan;
• Agree to take out a loan or co-sign your child’s loan;
• Designate some of the funds to be used for college if a marital home is to be sold.

Realistically, does your financial circumstance permit you to do so, even if you agree that contribution would be a good thing?

If your situation is such that one or both of you are unable to make any commitment at this time, you can include language that provides you will address it when the child is about to enter college. But the agreement should be clear as to what you will consider in terms of financial circumstances (assets, income, expenses, debt) to decide how much each can contribute. You also want to detail a process to follow, such as mediation first and then the right to go to court if you can’t agree.

Philosophically, do you believe that you should pay for college?

Or, if you feel that you either financially or philosophically do not want to commit to paying for college, then you can provide that any payment would be voluntary, and that neither of you can compel the other to contribute to college expenses.

How do you share the parental contribution?

Should it be paid by you both equally or pro rata to income?

Typically, parents agree that the contribution will be shared pro rata to their incomes at the time that the child is entering college. Others will consider this as an expense to be shared equally, no matter their incomes. Consider, though, if a party voluntarily stops working, you might want a way to determine what income should be imputed to that party, such as an average of past income or his/her income just prior to retirement.

In Part 2 of this series, we will define typical college expenses and look at limits on what a parent will contribute.