College Planning After Divorce: How Maryland Parents Can Use 529 Plans, FAFSA & Alimony

A divorce can affect your child’s college savings, financial aid, and ongoing financial support. Even so, there are resources available to help you and your child plan effectively for higher education.

Understanding the options for planning for college after divorce, and speaking with one of our Maryland divorce lawyers, may make it easier to support your child’s educational goals.

How can a divorce in Maryland affect college planning?

A divorce in Maryland can make it more difficult for your child to attend college for several reasons, including:

• A parent in Maryland is not obligated to pay court-ordered child support once their child is over 18 and has graduated from high school, or until age 19 if the child is still in high school.
• Many children go to college soon after turning eighteen, around the same time the court-ordered child support is ending.
• If the parent paying child support never agreed to pay for their child’s college education, as per the terms of their divorce, then they have no legal obligation to contribute to their child’s education.
• A parent who is estranged from their child as a result of the divorce may be unwilling to support their child’s college education.

For example, if your child relies on child support to cover education expenses and those funds stop, they may be unable to afford college. This can lead to a wealth of problems, some of which might include:

• Your child may need to take out substantial loans to earn a degree.
• Your child may struggle to afford the dorm room that many colleges require students to rent, in addition to other college expenses.
• Your child may need to work full-time to cover expenses, which could make it more difficult for them to graduate on time.

While divorce may make it more difficult for your child to attend college, there are several tools you can use to plan for their education.

What useful tools can divorced Maryland parents use to plan for their child’s college education?

A 529 plan

A 529 plan is a state-sponsored college savings plan that your child can use for what is considered “Qualified Education Expenses.” Qualified Education Expenses can include tuition, a dorm room, textbooks, and equipment, along with many other things.

If your child uses the funds within their 529 plan for Qualified Education Expenses, the earnings portion of those funds is not subject to federal income tax. This, paired with the compound growth that Maryland’s 529 plan offers, may help your child affordably attend college.

Funds in a 529 plan can help cover some of your child’s college expenses, but given the cost of higher education, additional financial support may still be necessary.

FAFSA

Free Application for Federal Student Aid (FAFSA) is an application to determine eligibility for financial aid, including grants and scholarships that do not need to be repaid, as well as federal student loans. Federal financial aid includes:

• Maryland state aid, including state-administered scholarships
• The Federal Pell Grant, for those with significant financial need
• Federal grants, administered by your child’s college
• Scholarships and grants, administered by your child’s college

Federal aid loans must be repaid, but they often come with favorable conditions that can make college more accessible. Grants and scholarships generally do not require repayment.

Alimony

Alimony is financial support that you may receive from the other parent, depending on the terms of your divorce settlement. Many alimony arrangements come with an end date, such as the completion of rehabilitative support, remarriage, death of either party, or modification by a court upon a material change in circumstances.

Setting aside part of your alimony payments can help with college planning. If you receive indefinite alimony, or at least through the years your child plans to attend college, you may be able to use a portion of those funds to support your child’s college expenses on an ongoing basis.

To pursue an alimony arrangement that may help your child attend college, consult an experienced Maryland divorce lawyer.

How can you plan for your child’s college education using a marital settlement agreement?

A marital settlement agreement is an agreement that you establish prior to ending your marriage. Your marital settlement agreement could contain enforceable provisions requiring one or both parents to contribute to college costs, such as:

• An agreement between you and the other parent, stating that the other parent will pay for your child’s college education in full.
• An agreement itemizing which college expenses the other parent will pay for, even if these expenses do not encompass the entirety of your child’s higher education.

Your marital settlement agreement is, if executed properly, generally binding, but child-related provisions, including educational expenses, may be modified by a court, and college costs are enforceable only if parents agreed to them.

Work with a Maryland divorce lawyer today

A divorce can make it more difficult for your child to attend college. McCabe Russell Divorce and Child Custody Lawyers can help. Contact us to speak with one of our Maryland divorce lawyers today. We may be able to help you secure a divorce outcome that makes it easier for your child to afford a college education.