Although many parents consider child support a major part of divorce litigation and settlement, many of them forget what is often one of the greatest expenses involving children: paying for college. For New Yorkers, such an oversight can be extremely costly.
How NY Courts Decide Which Parent Pays Tuition
New York courts have a "child-friendly" view when it comes to parents being responsible for their children's tuition and other expenses such as books and room and board. In fact, the state Legislature has made it clear that it expects courts to consider a number of factors in determining a parent's responsibility to pay. These factors include:
- The best interests of the child;
- The ability of the parent or parents to pay;
- The parent's education background;
- The child's education background, academic ability and academic endeavors.
Another major aspect of determining parent responsibility for college costs post-divorce in New York is what has become known as the SUNY Cap. In sum, a State University of New York (SUNY) cap, when drafted into a divorce settlement agree would limit a parent's contributions to college tuition based on the cost of attending a SUNY college or university.
Although courts will uphold properly drafted SUNY cap agreements, there can be a number if pitfalls if litigants don't know to look at them. Listed below are some important issues to consider:
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SUNY Caps: Issues to Consider
Be sure to define WHICH SUNY the cap is set by. There are dozens of schools in the SUNY system, and many of them have tuition expenses that vary by several thousand dollars. Therefore, specify which school the tuition is being set by. And if you are going with the highest cost school, be careful with broad language, as some pricier private schools such as the ivy league Cornell have state based programs. If you want those included, specify that land-grant SUNY's are included. If you do not want to include those higher cost programs, specifically state that instead.
Be sure to define timing. Tuition caps should be ideally based on when the children are attending college, not at the time the agreement is executed, as college expenses only increase over time. Conversely, if you want to only contribute a set amount from each parent, specify that amount instead, or "SUNY tuition at the time of the child's entrance into college up to x amount per year."
Also, be aware that courts will sometimes impose an amount beyond the SUNY cap where a "to be determined" is put on college costs—there is no SUNY cap presumption. That presumption only applies if initially drafted in the parties' agreement.
College costs go beyond tuition. Room, board, books, and other expenses should, if the parties intend for them to be included, be specified in detail. Otherwise, a court will limit the parents' responsibility to what is stated alone. This also applies to tuition for studying abroad. Unless specified, a court may not choose to enforce a parent's share beyond regular tuition.
Consider pre-college expenses. If your children aren't already in college or made their selections, the parties should specify their responsibility for pre-college costs: entrance exams such as the SAT and tutoring, college visits, application fees and the like. If the parents are not going to be responsible for paying, they must include language stating this or a court is likely to impute a percentage of those costs to them, depending on the circumstances. In a similar vein, be sure to specify that these terms and payments apply to college only. If a settlement agreement states "post high school education" a parent could be on the hook for graduate school as well. Even if a parent does intend to pay for part of graduate school, this should always be specified with the same level of detail.
You have to specify the impact of other forms of financing. Unless agreed upon in the settlement, the parties cannot use pre-divorce college savings accounts such as Uniform Gift to Minor or State 529 Savings to offset their future college costs. The parties must agree to this in detailed writing for that to occur. Additionally, the parties should have language determining if children's scholarships and grants go towards defraying the children's costs or offset the parents' respective college payment responsibilities. Otherwise, the court is more likely to impute it as benefitting the child. A parent will also have to pay for Student Loans unless you specify your child will have to take out loans to bridge the gap that the parties' can't cover. A parent may have to pay off their children's student loans for college in proportion to their share if they don't specify that their children are responsible for the student loans that they take out.
Consider the impact on child support payments. There is something called a "Rohr" credit that the non-custodial parent can apply for to reduce their child support expenses for a child attending college if they reside away from home during the months they are at school. However, the maximum credit cannot reduce a parent's support share so as to be less than the minimum for any children not away at school. Additionally, the credits do not apply to any payments made from saved up funds or trusts, they are exclusively for a parent's out of pocket costs.
Be clear on when support ends. Not every child's college experience is four years. Sometimes it can be two, other times up to six. Child support traditionally only lasts until 21, but many students are 22 their last semester on the four year plan. Therefore, specify in any agreement if the parent is cover four years of expenses, a particular degree, or through a certain age (such as 22 instead of the 21 used under the Child Support Standards Act.
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Though it can be tricky to ascertain what one's college payment responsibilities are, whether you are using a SUNY cap or ponying up for private school, specifying in great detail and precise language what each party is responsible for in your divorce settlement is the best way to avoid college cost disputes and litigation down the line.