Getting divorced in Michigan will have a significant effect on your finances, no matter what your financial situation might be. Even for couples in high net worth divorces, separating can have an impact on their ability to pay for an expensive college education for their children. For couples who are middle class or have even less savings, making the decision to get divorced could mean the difference between being able to pay for a child’s college education and barely being able to help out.
According to a recent report from CNBC, there are ways to prevent your divorce from “sabotaging your children’s college education.” While you may need to reconsider your finances and the way you are thinking about college funding, it is possible to make divorce work while still helping your children with their college educations.
Planning for College Financing Alongside the Dissolution of Marriage
Paying for college “is nerve-wracking for most parents,” regardless of whether there is a looming divorce. When you are in the middle of a divorce or when you are thinking about filing for divorce, the prospect of paying for college tuition and expenses can be much more daunting. As the report emphasizes, about 40% of marriages end in divorce, yet a large majority of married couples do not have a financial plan in place in case they do decide to separate or get divorced. When a married couple decides to get divorced and has minor children who are quickly approaching college age, the divorce can wreak havoc on the parents’ finances in general and, more specifically, their ability to help out with (or pay for) college tuition and expenses.
Each year, the costs of attending college increase by an average of 3%. On average, the total cost for tuition, fees, and room and board at a private, nonprofit college in the United States was almost $47,000 for the 2017-2018 academic year. The average cost of a year’s in-state tuition, fees, and room and board at a public, four-year college was almost $21,000 for the 2017-2018 academic year. These prices can be difficult to cover even in a two-parent household. What should parents who are planning to divorce do when it comes to managing college expenses?
Make a Plan for Paying College Expenses
Making a plan in advance is the best way to manage college expenses that arise just after a divorce. Planning ahead can help your child or children to understand the financial limitations, while also recognizing that you are doing everything you can to change their college plans. The article recommends that the following elements go into any parent’s plan:
- Reevaluate the benefits of a private college education versus a public college education with your child;
- Explore alternate opportunities for scholarships, grants, and low-interest student loans;
- Look into college tuition discounts when you have more than one child attending the same institution;
- Learn more about Michigan 529 College Savings Plans and start investing in one of them; and
- Work with a financial expert who can find other ways to save money for college expenses and tuition.
A Michigan Divorce Lawyer can Help