College Planning During Divorce and “Finding” Money

college planning during divorce

By Brian James, Divorce Mediator and Parenting Coordinator

Many of the parents we work with have no structured college savings plans set up for their children. After a divorce, the chances of setting up a 529 plan is even less likely because when people divorce, there are so many complex issues to discuss and agree to, and college planning during divorce takes a back seat.

Things such as, “We’ll work it out when the time comes” or “We’ll set something up after the divorce, when things calm down” are common phrases from our clients. Unfortunately, I cringe when I hear my clients utter these phrases. Even the most well intended parents have a hard time following through with these statements once the divorce is finalized. Chances are, if something is not agreed to and entered in court, there is a good chance nothing will get done. This in turn will lead to heated post-divorce college planning arguments, court dates and legal fees when the time comes to pay for college.

Whether your child is 6 months or 16 years old, college planning during divorce is necessary. Plans need to be made now for their college education. Pushing these decisions to a later date is not in your children’s best interests. As part of any divorce involving children, a family focused divorce mediator will ensure some sort of plan is put together on paper. They will help you implement a plan that works for both of you and benefits your children the most.

One major question divorcing parents have when discussing college planning during divorce is, “Where is the money going to come from to fund a college savings plan?”

This is an excellent question without easy answers. When going through a divorce, and making plans to live financially independent of one another, parents need to stretch their money far as possible, and since money doesn’t grow on trees, funding of college savings accounts is an issue.



As a divorce mediator who works with families on a daily basis, and one who has had two children in college at the same time, I have a few suggestions as to how to “find” some of the money needed for your children’s college planning. Though the following are not surefire remedies, as every family is different, something below may help:

1. Claiming of the children.

Chances are that when you were married, you filed joint tax returns. Once you are divorced, you will file individual tax returns. Your income, tax bracket and who claims the children in a given year will have a financial impact on each of your individual tax returns, possibly making your combined individual tax returns greater than your married one. I suggest speaking with an accountant who is experienced in divorce and divorce law. The extra money you receive as individuals can go towards a college savings plan.

2. Reviewing Auto, Homeowners and Life Insurance policies.

Speak to your current agent about what can be done to reduce your costs without lowering your coverage and obtain quotes from other insurance companies. However, be careful not to reduce your coverage and possibly put your family in financial ruin just to save a few dollars per month.

3. Make monthly auto-deposits into your children’s college savings plans, bank accounts, investments, etc.

No matter what the amount, anything is better than nothing, and having it done automatically makes it “out of sight, out of mind”.

4. Designate a portion of your tax return, work bonus, commission check, etc. to go toward your children’s college savings plans.

5. Instead of family members giving your children unnecessary gifts for their birthdays and holidays, ask them to deposit money into their college savings account.


Who claims a child on their tax return, as they get closer to high school graduation, is very important when filling out the F.A.S.F.A. (Free Application for Federal Student Aid). Though this is not a savings plan, doing this the right way may save thousands of dollars in interest payments on student loans and set your child up for better financial aid.

When it comes to college planning during divorce, some of the above suggestions, specifically 1, 3, 4 and 6, can be made legally binding by adding specific language to your divorce agreement. Some people need something in writing to ensure they will in fact plan for their children’s college education.

Though none of these suggestions will pay for 4 years of college, if followed, they are  proven ways to start saving and chip away at the ever growing cost.

It is also very important to keep in mind other costs during your child’s college years: health insurance, clothing, cell phones, vehicle expenses and insurance, spending money, etc. Once your child graduates from high school, college is the only expenses you are legally required to help them with. Make sure your divorce agreement plans for these costs and how they are paid.


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Brian James, Divorce Mediator and Parenting Coordinator


Brian James is an experienced Divorce and Family Mediator with offices throughout Chicagoland and Southeastern Wisconsin. He started his mediation practice, C.E.L. & Associates, Inc. in late 2005. For more information, please visit Brian’s website, or  give him a call at (312) 524-5829. He makes it a point to personally answer every call received.


Like this article? Check out, “Divorced Parents Paying for College”

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