How To Plan For College And Manage Your Divorce In The New Year.
With the start of the new year comes the start of many breakups and divorces. It’s hard for any one person to truly wrap their arms around all of the emotional and financial turmoil when thrust into this new world of attorneys, mediators, coaches, therapists and financial advocates that may all likely comprise part of your divorce team.
While your head may be spinning from all that you are dealing with, especially if you have children, it’s important to also consider their needs during this difficult time. One of those very important topics is College.
Oftentimes, I work with already divorced clients and college for the children had not been mentioned in their legal documents at all. Other times, the subject of college may be included but such vague language was used that it still needs to be re-discussed and negotiated. And other times, it might include limits as to each parent’s financial obligations/exposure for college costs.
If you currently have children in high school or college, and you are dealing with a separation, there is good news! It may be possible for you to save money on the cost of college due to a change in your household situation! This may be the one plus side to divorce and potentially a win-win for both parents. Through FAFSA (Free Application for Federal Student Aid) and through the appeals process, it will now be possible, depending on a host of factors including income and where the child lives, for more aid to be offered to the student by the university.
For parents with high school children, it’s important to become knowledgeable about the financial aid process as you begin your legal negotiations. You need to protect yourself as well as your children, both financially and emotionally! Ideally, you will want to include as many details as possible within your divorce agreement regarding college and division of costs.
Applying to college is an entire process that typically starts in 9th grade. Financially, you may have been saving for your child’s college education since the child was a baby. But for many parents, this was just not possible. In 10th or 11th grade is when it is most beneficial to consider the parent(s) finances, the student’s academic accomplishments, the child’s living situation, including who is the custodial parent, and then find those colleges that are most likely to offer the student merit scholarships.
Then, in fall of 12th grade is when financial aid applications are completed. But what if the information that is required for the financial aid applications is now no longer relevant due to a separation? That is when the appeals process comes into place. And this applies to all situations where there has been a drastic change in household finances. It may be due to separation or divorce, or other things such as a job loss, a medical illness, a death of a parent and other situations that affect the household’s finances. Typically, in the winter of 12th grade, or anytime for current college students is when this information can be addressed by the individual colleges.
When thinking about our children, I know that we all want the best for them! Especially if they are already navigating their parents divorce! It is so important, though, to consider the bottom line price tag of each educational institution before saying “Yes!” When facing what might be our own financial hiccups while moving forward with a divorce, we do not want to inadvertently jeopardize their futures as well as ours, with mountains of student loan debt. That debt could potentially cause our children to not be able to afford marriage or their first homes. The portion of debt, which typically falls under Parent Plus Student Loans, can also drastically reduce our ability to afford retirement!
The key to good financial planning for college when dealing with a separation or divorce is to plan as early as possible and to be strategic. If not too late, include college in your divorce agreement so that both parents are fairly sharing in the cost. Find the colleges and universities most likely to offer the most merit aid, have your child take college level classes for credit while in high school, hopefully reducing the amount of time to graduate from college. Take and retake SAT and ACT exams in search of even greater merit aid from the schools. Complete all financial aid applications completely and accurately based on your new situation. File appeals if warranted, showing your reduced household income and why. Minimize the need for student loans or, if needed, find the lowest cost student loans with the best terms.
And always be mindful of the bottom line cost. For more information about the services that College Financial Prep offers, visit: https://www.collegefinancialprep.com/if-you-are-a-divorced-parent.html