How Do Divorced Parents Pay for College?
Divorced parents who want to send their children to college need to figure out how to pay for the cost. In New York, a family judge will consider several factors, including the child’s needs, the parent’s ability to pay, and the child’s benefit from a college education. In addition, a divorce agreement can include a cap on the cost of private education.
Tax credit benefits
Tax credits for divorced parents who are paying for their child’s college education can help offset the costs of college. These credits can increase to as much as $10,000 over four years. The amount of money a parent can claim is also dependent on their income level. It is important to remember that tax credit benefits begin to phase out at higher income levels. For this reason, it is important to seek expert advice.
Children can also help parents reduce their income tax burden. For instance, the 2012 dependent exemption can take $3,800 off their taxable income. Children are also eligible for a number of tax credits. However, these credits can’t be transferred to an ex-spouse.
Separating assets to pay for college
If you’re a parent who’s separated from your spouse, you may be wondering how to pay for college. You can use a separation agreement to pay for college, but these agreements typically only cover a bachelor’s degree, and higher-level educational expenses will need to be funded by both parents. In addition, you need to consider the financial resources of your child when determining how to split up college costs.
One way to divide up the college expenses is to set an annual amount for each parent to contribute, either jointly or separately. This amount can be based on their income and assets. A common amount is $3,000 per calendar or school year. This figure covers the cost of two years of tuition at a community college or SUNY college. By setting an annual amount, parents can determine how much each parent will be able to contribute each year and then create a financial plan.
Negotiating a tuition agreement
The best way to ensure that your child’s higher education expenses are covered during a divorce is to negotiate a college tuition agreement. This will help prevent disagreements and questions down the road. It will also help establish how each parent will contribute financially. Most parents want to ensure that their child’s higher education costs are handled fairly by the other parent, so it’s vital to work out the details of this type of agreement as early as possible.
First, the parents must agree on the type of school the child will attend. Depending on the type of school, the parties may agree to pay different amounts of money for the child’s education. In addition, parents must decide how much support each other will provide if the child fails to attend school. The parents must also agree on the consequences of breaching the agreement.
Filing the FAFSA
Many parents wonder how to pay for college when they are divorced. There are several options, but they usually require both parents to be on the same financial footing. One solution involves setting up a trust for the children that would allow them to earn money toward their college education. While this may not be the ideal option, it does allow parents to have a say in the education of their children.
Filing the Free Application for Federal Student Aid (FAFSA) is the first step. The FAFSA is a form that asks for detailed financial information, and it will determine if your child is eligible for federal financial aid. You will also need to include the income of your new spouse if it is different from yours.
