Parents in Michigan who are going through a divorce might worry about how the split might affect their children’s higher education. Without a plan, it might be difficult to save money to cover tuition, room, board and other financially-related costs. However, they have options they can build into their divorce settlement to ensure that they will help their children cover these expenses.
Figure out what is right for your family
The first thing divorcing parents need to do is reach an agreement on an option that is right for their family. This is important as it will allow the parents to set goals, even as each moves on in their new life and becomes financially independent from the other. Figuring this out will involve choosing the right funding option as well as stipulations and rules on how the money can be used.
Options for financial planning
Parents have several options when they begin planning how to fund their children’s higher education costs. These include:
- Setting up a joint savings account where they deposit a set amount each month towards their children’s higher education costs
- Anticipating what college costs will be when the child graduates and committing to a formula for funding these costs, such as half each parent or one-third each parent and the child
- Agreeing to cover all financial costs at the in-state public university rate between the parents, with the child covering any additional costs if they choose a private or out-of-state college
- Setting up 529 accounts for each child with accountability clauses that show each parent is meeting their contributions each quarter
As part of wanting what is in the best interests of the child, parents often want to be able to support them through higher education. However, this takes planning, particularly if parents are divorcing and beginning separate lives.