University of Virginia

Divorced Parents and College Costs

A new study by researchers from the University of Wisconsin and Rice University looks at the relative contributions of divorced and married parents to their children’s college costs and comes up with some surprising findings.   One of the more interesting ones:

  • Middle income divorced parents contribute significantly more than married parents.

Yes, you read that correctly.  The authors find that in lower incomes, the situation is reversed, with lower income married parents contributing more than those divorced.  But once you move above an  income of  $40,000, it flip-flops.  (The income figures come from 1995.)

Two possible theories are put forward (and other common ideas dismissed.)  First is that non-custodial parents often have something of a “financial role” in their child’s life, and that role continues into the college years.  The custodial parent, on the other hand, may feel the need to “keep up with the ex” once college starts, and they do this by writing a check for college costs.  The students benefit from this parental “competition.”

The second theory, though, is more relevant to college funding planning.  Settlement and support agreements often require ex-spouses to confront future college costs in some fashion.  Because of that, children of divorce may get something that children of married parents do not–a specific plan that addresses paying for college.  The children benefit from their parents’ planning.

Divorce is stressful enough.  A college funding plan that is customized for your family’s needs can reduce that stress and save you money for all the other important things in life.