College tuition may be the costliest expense parents pay for their children. Although many parents struggle to help their children pay for college, divorced couples face additional obstacles. With two separate households to maintain, Kentucky parents have less money to spend on tuition. However, those who establish a plan to cover the costs of college when their children are young, before they consider divorce, may find it easier to manage.
Many parents today use 529 plans to save for their children’s college educations. The funds in these tax-exempt accounts can be withdrawn tax-free as long as they are used for educational expenses. Divorcing parents who have 529 plans may ask their attorneys to write provisions for them into their settlement agreements. Spouses may arrange to split the accounts or set up 529 plans so that both parents are able to monitor them.
Parents may have to change their educational plans after a divorce. For example, a couple who once hoped to be able to send their children to a private university may have to consider public colleges or even enrolling their child in community college for the first two years. Instead of depending on their divorced parents to finance the entire cost of tuition on their own, students may apply for scholarships, grants and loans to help pay for their education.
Parents who agree to help their children continue their educations may have this included in their divorce decree. This could mean making changes to a 529 plan, continuing child support until the child finishes college or some other creative arrangement agreed upon by the parents. Whatever they decide, it’s important to get the details in writing so that there’s no question how the tuition will be paid once the children reach college age.