Payment of College Costs

1. Who should pay for the cost of college?
 
In most circumstances, the privilege of parenthood carries with it the duty to assure that the child receives a good college education. Our courts have held that, in general, financially capable parents should contribute to the higher education of children who are qualified students. In evaluating a party's obligation for contribution toward the cost of higher education, courts will consider the following 12 factors:
 
(i) Whether the parent, if still living with the child, would have contributed toward the costs of the requested higher education;
 
(ii) The effect of the background values and goals of the parent on the reasonableness of the expectation of the child for higher education;
 
(iii) The amount of the contribution sought by the child for the cost of higher education;
 
(iv) The ability of the parent to pay that cost;
 
(v) The relationship of the requested contribution to the kind of school or course of study sought by the child;
 
(vi) The financial resources of both parents;
 
(vii) The commitment to and aptitude of the child for the requested education;
 
(viii) The financial resources of the child, including assets owned individually or held in custodianship or trust;
 
(ix) The ability of the child to earn income during the school year or on vacation;
 
(x) The availability of financial aid in the form of college grants and loans;
 
(xi) The child's relationship to the paying parent, including mutual affection and shared goals as well as responsiveness to parental advice and guidance; and
 
(xii) The relationship of the education requested to any prior training and to the overall long-range goals of the child.

2. Does a person have to pay for the college costs for his/her child?
 
The courts have viewed education as a necessity. The recent trend in New Jersey has been to require parents to pay for the college costs for their children. Therefore, if the child is attending college, then it is very unlikely that a court will grant an emancipation motion.
 
When a court makes a decision as to whether or not to require a parent to pay for a child’s college education and related expenses, the court must consider the complete set of facts of each case. The court will analyze the following factors to assess if a parent should pay for a child’s college costs: (i) the effect of the background, values, and goals of the parent on the reasonableness of the expectation of the child for higher education; (ii) the amount of contribution sought by the child for the cost of the higher education; (iii) the ability of the parent to pay that cost; (iv) the relationship of the requested contribution to the kind of school or course of study sought by the child; (v) the financial resources of both parties; (vi) the commitment to and aptitude of the child for the requested education; (vii) the financial resources of the child, including assets held individually or in custodianship or trust; (viii) the ability of the child to earn income during the school year or on vacation; (ix) the availability of financial aid in the form of college grants; (x) the child’s relationship to the paying parent, including mutual affection and shared goals as well as responsiveness to parental advice and guidance; (xi) the relationship of education requested to any prior training and to the overall long range goals of the child.
 
The decision on whether or not a parent should pay for the college costs rests in the court’s hand. However, there is a strong trend toward requiring parents, if they are financially capable, to pay for college. In most cases, the court will not require the payor to pay for college and for child support at the same time. However, once again the key issue is how much money the payor (who is usually the father) has.
 
In most cases, if there is an ongoing dispute as to who pays for college, then the court will set down a plenary hearing. The parties will be required to exchange discovery and prepare a CIS. In simpler terms, the parties will be required to exchange their tax returns, W-2's, and a list of their assets. The court will then hold a plenary hearing, and review the proofs and listen to the testimony of the parents. Thereafter, the court will determine each parent’s contribution to college. Moreover, the court will determine if any child support orders should also be modified.

3. What if my divorce judgment does not mention that I have an obligation to pay for my child’s college education?
 
Many people simply get divorced and they omit many important provisions in their property settlement agreement or in their judgment of divorce. The divorce centers are relatively inexpensive to use. However, a person may spend thousands of dollars to try to correct mistakes that a divorce center may have made. It is imperative that a provision that spells out who should pay for college is incorporated into any divorce judgment. Nonetheless, even if this provision is not put into the divorce judgment, in the majority of cases a court will still require both parents to contribute to the child’s college costs. The court will set the case down for a plenary hearing. These hearings are commonly referred to as Newburgh/Arrigo hearings. The parents will be required to produce their pay stubs, W-2's, and tax returns, and will have to prepare a CIS. Thereafter, the court will try to fairly apportion each parent’s proportionate share of contribution to college expenses that he or she must pay.

4. Should a property settlement agreement contain terms about who should pay for college?
 
Absolutely. No person with children should get divorced unless a property settlement agreement or a judgment of divorce contains terms that delineate each parent’s obligation to contribute to the children’s college costs. The clause that I incorporate into my property settlement agreements is as follows:
 

Contribution to College Clause 
 
Post-Secondary Education. The parties agree that they desire to see the children attend college, a university, vocational school, or other post-secondary education. The parties agree they will cooperate in the selection of post-secondary education. The school selection shall be based on the children's capabilities, opportunities, the children's desires, and the parents' income and assets and respective financial ability to pay at that time. The children shall be required to use their best efforts to apply for grants, loans, and scholarships for which they may qualify. The balance of the expenses associated with the post-secondary education, including the cost of tuition, room and board, SAT preparation courses, PSAT and SAT testing fees, application fees, miscellaneous fees, and transportation to and from home at the beginning and end of the school year and for holidays shall be shared by the parties in proportion to their income and assets at that time. The parties’ respective contributions for the children’s post-secondary education shall be allocated after application of any financial aid received by the children and after application of funds held by the parties for the benefit of the children including but not limited to savings bonds, custodial accounts, and similar savings vehicles for the children. Discussions regarding a child’s college choice shall begin no later than the spring semester of his or her junior year in high school. The issue of the amount of child support due from either parent for a child who is attending a post-secondary institution shall be evaluated and determined at the time. 

5. What is the leading case that determines who pays for the price of college?
 
The leading case is Newburgh v. Arrigo, 88 N.J. 529 (1982). In this case, the Supreme Court of New Jersey held, on public policy grounds, that the parental duty to provide an education to children extends to the responsibility to provide a college education. As a result of this seminal case, New Jersey became the most liberal jurisdiction in the nation in terms of post-high school financial duties of parents. 

6. What is the rational of the Newburgh v. Arrigo holding?
 
The underlying rational of the Newburgh v. Arrigo decision is that if society does not mandate the duty of parents to pay for their children’s college costs, then the number of children who go on to higher education will decrease. Moreover, society will suffer if fewer children receive a college education.
        
My personal view is that both parents, whether married or divorced, have a moral duty to contribute to college if they are financially able to do so. The citizens and parents of New Jersey’s children have an obligation to contribute to their college costs if they are financially able to do so. New Jersey has a vested interest to encourage children who want to go to college. If they have the academic ability, then children should be able to attend college without assuming staggering student loans, if their families can afford to help out.
 
There is no doubt that New Jersey is one of the most liberal states with regard to child support and requiring parents to pay for their children’s college costs. An overwhelming majority of states do not require parents to provide their children with a college education. 

         
 
7. Is a parent required to pay for a child’s graduate or professional school?
 
In New Jersey the duty to pay for a child’s college expenses extends beyond college, to graduate and professional school. In the case of Ross v. Ross, 167 N.J. Super. 491 (Ch. Div. 1979), the court held that a parent has a responsibility to pay for a child’s graduate and/or professional school. In the Ross case, the court found a 23-year-old daughter to not be emancipated until her law school training ended and required the father to continue paying child support for her.

8. My daughter wants to go to Harvard; however, I only earn $50,000 per year. Will I be required to pay for her tuition?
 
Every application to require a parent to contribute to college costs is different, and each stands on its own merits. Every case is decided on a case-by-case basis. In most cases, the court will set up a plenary hearing, and order the parents to provide a CIS and disclose their financial information. In a situation like the one above, the court would only require the parent to contribute to a portion of the Harvard costs. An important case is Nebel v. Nebel, 103 N.J. Super. 216 (App. Div. 1968). This case established the “Rutgers” rule. In Nebel, the court ordered a financially able father to contribute to the college education expenses of the son, but it also held that, while the custodial mother could designate a private college, the court would limit the college expense obligation of the father to his share of the far lesser costs of attending a state university, such as Rutgers, where a quality education could be obtained. 

9. What if I can’t afford to send my children to college?
 
In many cases, a parent has gotten remarried, and he or she is now supporting two families. Many parents cry the blues when they are faced with applications to require them to pay for their child’s college costs. I always try to console the client, advising that the money is going to a good cause. Moreover, I always respond to the client with the following: “Don’t you want your child to be successful?” Most clients agree with my logic and they see my point!

Nonetheless, some parents are still very cheap, and they refuse to be agreeable in paying for their child’s college. If a parent is financially challenged, then they can apply to the court for a hearing that is commonly known as a Newburgh/Arrigo hearing. The court will order the parties to prepare a CIS, and disclose their pay stubs, W-2's, and tax returns. Thereafter, a hearing will be held. The court will review the evidence and hear the testimony of the parents. Thereafter, the court will attempt to fairly apportion the costs of college.
 
There is a trend now emerging where some judges refer college contribution disputes to ESP, or an Early Settlement Panel. This is an excellent idea, and it should be used more often by our courts. At an ESP hearing, two very experienced matrimonial lawyers will try to assist the parties in reaching a settlement on college contribution issues. In most cases, the parties can reach an accord on the college contribution dispute at the ESP hearing and avoid spending additional thousands of dollars on legal fees. The costs to prepare for a Newburgh/Arrigo hearing can be substantial. Moreover, the money that is saved on legal fees can be used to pay for the college tuition that is in dispute.

10. Are there situations where the contribution for college is not warranted?
 
There are certain situations in which a contribution to college is arguably not warranted. The most obvious situation is when a child is alienated from a parent and refuses all contact despite the parent’s efforts to maintain a relationship. Even though there is no relationship, the child still requests that parent be held responsible for college. A very perplexing question then arises. Should the child who unreasonably refuses to have a relationship with a parent, and who fails to include that parent in the college selection process, be able to turn around and demand a contribution to college?
 
The answer to this dilemma is determined on a case-by-case basis. The Arrigo v Newburgh case requires the family court to consider the “child’s relationship to the paying parent, including mutual affection and shared goals, as well as responsiveness to parental advice and guidance.” Id. at 545.

11. What are some of the cutting edge cases with regard to who should pay for the costs of college?

A. Child estrangement.
In spite of his claim that he was estranged from his son and that the estrangement was not of his own doing, the father was nevertheless ordered to pay 44% of the college expenses of the son. This result applied even though (a) the parties did not address the issue in their New Jersey divorce agreement, and (b) the mother gave the father no notice about the child's college plans. The court noted that the father did not attend court-ordered therapy sessions. Conod v. Hall, New Jersey App. Div., July 21, 2005.
 
B. Dentist pays more.
After their New Jersey divorce, the parties had a dispute regarding the sharing of their son's college expenses. It was error to have the ex-wife pay for almost 19% of those expenses, when the ex-husband, a practicing dentist, made more than $500,000 annually and had much more discretionary income. By contrast, the ex-wife's income was mostly from alimony and child support and went to maintain her home and personal expenses. Bowne v. Anderson, New Jersey App. Div., June 29, 2005.
 
C. Appealing an aid offer.
Once you receive a college's financial aid offer, it's a done deal, right? Not necessarily. Aid packages can be appealed and enhanced -- even for this fall. If you think a college hasn't considered your complete financial situation, it's worth a try. Stuart Siegel, a certified college planning specialist, says that while families are awarded fair financial assistance most of the time, there are times when “persistence pays off” in improving aid packages. “I had one family where the parents were divorced and the child received no aid for the first three years while attending Northwestern University,” Siegel says. “The applications from the parents contained conflicting information and that's why the student got nothing and wasn't going to be able to afford to graduate.” After reworking the aid forms with new information, Siegel says the student received $17,000 from the college for her senior year. Bloomberg.com, June 2, 2005.
 
D. Age of emancipation.
Unlike other states, New Jersey law does not deem a child emancipated at any particular age. Instead, the focus is event-driven, i.e., when is the child no longer economically dependent on her/his parents? In this case, the parties' 23-year-old son was not emancipated until after he received his college degree, even though that required an additional semester past the fourth year of college attendance. Colonno v. Colonno, New Jersey App. Div., April 4, 2005.
 
E. College trust fund.
The mother wanted to have a $50,000 college trust fund established for the parties' daughter, using the proceeds from the sale of their rental property. However, the parents' responsibility for college contributions and the provision for the sale of the rental property had previously been stipulated. Thus, the application was denied because it failed to address any of the college contribution factors under Newburgh v. Arrigo. Actually, the mother was merely speculating that the father would shirk his responsibilities. Nesic v. Nesic, New Jersey App. Div., March 9, 2005.
 
F. Relationship with child.
Under New Jersey divorce law, both parents may be obligated to pay for their child's college education. Sometimes that obligation can be avoided if the child is estranged from one or both parents without just cause. An effective way of dealing with such issues is to address them in an agreement. Here, however, the parties expressly reserved the issue for future decision. Even though there were questions of fact as to the lack of connection between the daughter and her father, he was required to pay for one-half of the college expenses, relationship issues notwithstanding. Jackson v. Jackson, New Jersey App. Div., February 7, 2005.
 
G. Graduate school expenses.
Some states emancipate a child at age eighteen. But under New Jersey family law decisions, a child is not automatically emancipated at any particular age. Further, New Jersey parents can be obligated to pay not only for their child's college education, but also for graduate school. Here, the court found that the parties' 23-year-old daughter was not emancipated merely because she had graduated from college, because she was continuing her post-graduate education in a six- to eight-year Ph.D. program. Burg v. Burg, New Jersey App. Div., January 25, 2005.
 
H. Parental estrangement.
In a New Jersey divorce action, the court has the power to order the parents to pay for their child's college (and sometimes graduate school) expenses. A complex set of variables is considered in deciding which parent pays how much, originally outlined in Newburgh v. Arrigo. In the present case, the father had been ordered to pay 50% of his daughter's tuition loans which she incurred while obtaining a college degree. The father had appealed and the trial court's decision was reversed in Gac v. Gac, 351 N.J. Super. 54 (App. Div. 2002), for the failure to properly address the Newburgh factors. These factors included the father not having communicated with the daughter since age five and his not having been consulted on the choice of college, including whether or not a cheaper State college could have been chosen. On remand, the father was ordered to reimburse his daughter 40% of the $70,000 she incurred in undergraduate tuition loans while attending college, plus interest. Gac v. Gac, New Jersey App. Div, January 19, 2005.
 
G. Terms of divorce agreement.
College expenses can be the costliest of all child support obligations. What if the parents provide for this contingency in their divorce agreement? This case demonstrates that the court is not necessarily bound by the terms selected by the parties. Here, they had agreed that payment should be in the ratio of their incomes at the time, but that neither party should be responsible for less than 20% of those costs. The trial judge found that the net college expense for the parties' daughter, after deduction of the amount he found the daughter should be contributing, was $20,000; he did not abuse his discretion in ordering the defendant-father to pay $5,000, or one-quarter, of those expenses. Francis v. Francis, New Jersey App. Div., December 7, 2004.

12. Will a parent be required to pay for both child support and for a contribution to the child’s college costs?
 
The answer to this question is “maybe”. The courts treat every case on an individual basis. The court will once again hold a plenary hearing that is often called a Newburgh/Arrigo hearing. If a parent is “rolling in the dough,” then in most cases a court will require that a parent continue to pay for child support and also contribute to the costs of college. However, if a parent has additional children from a new marriage, and if he or she is financially strapped, then the court will in most cases only require the parent to either continue to pay for child support or contribute to college, not for both. The courts try to be fair with everyone. Most family court judges do not want to make a parent go bankrupt. However, if a parent has the money, then he or she will pay for child support and will also be required to contribute a fair share towards college.