If you’ve been divorced for a number of years already and now it’s time for your child to go away to college (or your child is already away at college full-time), chances are the child support payments you make to your former spouse should be changed.
In New Jersey, divorced and divorcing parents are generally obligated to financially support their children until each child becomes “emancipated.” For a child who attends college full-time, he or she becomes “emancipated” upon completing full-time attendance at college or reaching age 23 – whichever occurs first.
By the same token, the New Jersey child support guidelines are intended to apply only to children younger than 18 years old or otherwise still in high school.
Divorcing parents also have a separate, though related, obligation in New Jersey to contribute to the cost of college for their children.
So, if your child support obligation in your divorce agreement was calculated under the New Jersey child support guidelines, your divorce agreement likely requires child support payments to be “reviewed,” “revisited,” or “recalculated” when each child graduates from high school.
Therefore, you should first check your divorce agreement to see whether it specifies how child support will be recalculated and how college costs are to be paid.
Otherwise, New Jersey child support laws require the court to determine the amount of child support for a child away at college full-time on a case-by-case basis by considering the factors listed in N.J.S.A. 2A:34-23.
To save fees and avoid the inherent uncertainty of a court decision, many divorced parents prefer to negotiate an out of court settlement with the help of their family lawyers to agree on the appropriate amount of child support and how much each parent will contribute to college costs.
Here are 5 steps when negotiating an out of court settlement with your former spouse on child support and payment of college costs:
1. Gain cooperation from your former spouse.
Approach your former spouse in a conciliatory manner about discussing a “concern” you have about your son or daughter.
This can get you both on the same page as to the values you both believe are important in raising your son or daughter.
For example, it might be important that your child develop a “work ethic” by contributing to his or her own spending money, car expenses, etc. This tends to promote confidence in your child, a sense of responsibility, and help your child develop positive financial habits for the future.
Likewise, you might highlight the benefits to your former spouse. For example, the more you’re contributing to child support when your child is away at college, the less you might have to contribute to the actual costs of college.
2. What are the expenses being incurred for your child each month?
Ideally, you and your former spouse should each identify the amount of “child-related expenses” and “college-related expenses” incurred each month. “Child-related expenses” might include, for example, medical insurance to cover your child, clothing, automobile expenses including insurance, entertainment, and food while at home. Do not include monthly expenses that are part of college costs. For example, food while your child is away at school is typically included as “room and board” college costs.
College expenses would include, for example, tuition, books, and room and board. You should first look to your divorce agreement to see if it designates which expenses are considered “college costs.”
3. How much money is available from financial aid, college savings accounts (e.g., 529 accounts) or other resources, and from any contribution from your child?
For child-related expenses, if your child is working or otherwise able to contribute financially to his or her own expenses such as car payments, entertainment, and other expenses, estimate how much your child might reasonably be able to contribute each month.
For college expenses, after you’ve applied any funds from financial aid and/or college savings accounts, determine the balance left to be covered.
4. How much income and expenses do you each have?
Ideally, you and your former spouse should each complete and exchange “Case Information Statements” and most current income tax returns.
Then, calculate each parent’s percentage share of your total combined income to come up with how you might apportion the balance of expenses between each of you.
For example, assuming you and your former spouse earns a combined total income of $200,000 per year, with one parent earning $150,000 and the other $50,000. Here, the parent earning $150,000 earns 75% of the combined income ($150,000 divided by $200,000) and the other parent earns 25% of the combined income. Your family lawyer can help you calculate these percentages.
5. Determine how much you and your former spouse will each contribute to the remaining child and college-related expenses.
One option for apportioning the balance of expenses left to be covered in #3 above is you and your former spouse to share the expenses based on each parent’s share of combined parental income. For example, the parent who earns 75% of the combined parental income might pay 75% of the expenses.
The key, however, is to come up with a plan that you and your former spouse can agree upon. This also helps take the pressure off your child by having predefined responsibilities for each of you, including your child.
For additional information or questions about child support for college-age children, please call or contact us for a personalized one-on-one consultation.