Will I have to take out student loans for my kids?

[Scanner]

http://www.weinbergerlawgroup.com/faq/who-pays-for-college-after-separation-divorce.aspx

I live in NJ.

I completely want to contribute towards my kid's college cost but the verbiage in this kinda scares me, thinking if he goes to a private school with excessive tuition (which is a possibility), I am going to be on the hook for half, which means loans late in life.

I was hoping for a 1/3, 1/3, 1/3 father, mother, kid split but it appears that this debt may be compulsory?

True? Any ESQ's out there?

[disneysteve]

"Divorced parents in the State of New Jersey are expected to experience an economic sacrifice for their children in order to provide them a college education."

Wow. That sucks. How can any court dictate that a parent, divorced or otherwise, must sacrifice to put his/her kid through college?

And I also love the part about if the kid works on breaks, the money can go for entertainment, not towards their education. That makes no sense. Kids can earn a lot more money over the summer than they can during the school year. This should be just the opposite. Work a few hours per week during school to earn some pocket money but work full time over the summer to help pay for school. This makes no sense at all.

[bjl584]

Heck,
The courts should also dictate that parents should support their kids after college as well. Maybe just support them till they're 40 while they are at it.

I don't know how a court can dictate that someone pay for something that is voluntary. College is optional. Kids decide that they "want" to go. They also decide what school to go to. But, there are loans, scholarships and the military that will help pay for it.

[Scanner]

Welcome to NJ.

I mean we can get all conspiratorial about too. . .NJ courts have to keep the colleges funded, keep that bubble from bursting so what better way than to "tax" a parent $10,000-20,000+/year?

Don't get me wrong. . .I want to be a "benefactor" but this "vagueness" in the law is unsettling.

I used to make financial independence a goal of mine. Since the legal realities of divorce set in, it's now become an unreasonable goal.

The goal now is simply to survive and stay out of debtor jail.

[Scanner]

BJ,

The courts don't view college as "optional". They say an education is a "necessity" like healthcare or housing. That's their position.

NJ is actually the only state I believe with this strict of a child support law. I may be on the hook for graduate school too. That's the reality of the law. If you read some legal blogs, lawyers to get clients will say things like:

"Well, don't you want your kids to be successful? Don't you, BJ?"

(well, don't you, BJ?)

Divorce is such a huge issue in people's finances, it honestly deserves a separate section here at savings advice. I feel like the past "Scanner" is worlds away from you normal folk.

My best hope is this can worked out. I'd say my chances are 50/50 of an agreement. I am banking on with college looming she won't want to spend $3500+ a piece to wrangle this out in the courts.

A private agreement is everyone's best interest but you have to refer to the law as a starting place. I can't just go in and say, "I'm not ponying up." (nor should I anyway)

[Scanner]

All financial resources of the parties should be assessed so as to determine if the assets need to be invaded to make the payments should income not be available. This would include equity in a home, bank accounts, brokerage accounts, savings bonds, retirement funds, business interests, life insurance cash value, etc. If one party is spending lavishly on expensive cars, boats, collectibles or vacations, while claiming that there is no available money to assist in college tuition, a court should be advised of these significant details.


There is honestly a questionable impetus to save at this point in my life, if it can be raided by a court and that's a reality.

The same with a house. . .they can I guess force a home equity loan on you, attach a lien on your house? Not sure how that works. I guess you have to take out a home equity loan at age 50-60.

Believe it or not, as much as a saver as I used to be, I am kind of at peace with it (weird, huh?). All that investment stuff you guys post about day after day. . .that seems like years ago when I was married. The friends I made here. . .seem like foreigners.

Don't get me wrong. . .I'm not a "broken man" by any means but I now see the folly of trying to "get ahead" when a deck is completely stacked against you.

[rennigade]

Wanna know the best thing about Jersey??? Nothin!

Like someone else said...what a great way to keep the education bubble from bursting...to force parents to pay. What a genius idea...completely idiotic...but we wont go there.

[Scanner]

You know. . .I kinda get the spirit of the law.

You have men (or women) who just get their kid to 18, file for emancipation and then the kid is stuck paying for college on his/her own, without even so much as $50.00 here or there, when the parent could help out a little at least. Man becomes so estranged by then often too, he doesn't even know the kid because mom was poisoning kid with lies about how awful the father was (that hasn't happened to any great extent with me, thank God). But that happens too. I get everyone's "pain." So kid has been denied a financial benefactor, as well as a "dad."

I think a reasonable percentage of income is fair (but not for graduate school geez). If you make $40,000/year, maybe 5% - $2000/year as a floor, hopefully you help out more.

But to just hand a parent a bill, sticker price, and raid their accounts or home equity, I am simply flabbergasted at the law in this regard.

Not even bankruptcy laws can penetrate that far, I believe.

Yet divorce law apparently can.

I have tried to resist all temptation to just give up but I completely get why men just give up and I actually completely get why we, as a country, house, feed, and care for a lot of men in jail for failure to pay child support (I am current and up to date).

There is absolutely little incentive to earn more and little incentive to save. Happiness, post-divorce, can NOT be found in pursuing wealth and/or strong finances.

[disneysteve]

Scanner, nowhere in that article does it say you have to pay half. It just says you have to contribute within your means to do so. Obviously, how much you can "afford" to contribute is open to debate. What I wonder is what formula they use to determine that. Do they allow you to be contributing 15% for retirement? What else is and is not allowed.

As a married parent, I can tell you that we will not be contributing fully to our daughter's education. It remains to be seen if we will borrow any money for that purpose but we'll determine what we can afford and that's how much we'll put in.

[Scanner]

I know it's vague.

I know it's hard to understand but it's the uncertainty of it all that's difficult to live with.

How would you like it if let's say your town you lived in said, "You know. . .we may need to come in and raid your accounts to build a new road, if we determine we need it. After all (instilling guilt), you use it, DisneySteve. We take these 12 vague factors into consideration and how good our attorney makes an argument."

The psychological effect is subtle and insidious.

Really, I do my best to resist it. I don't quit my day job out of a case of "divorcitis" but you have some how "relinquish" old goals (wealth) of past, at least for awhile and just resolve, or well, have faith a karmic universe will be kind if you put good will and karma into it, I guess.

But yeah, I think have to excuse myself from the club of saving advice graduates at this point, hand in my diploma and tassles.

For now, wealth is no longer a goal of mine.

[bjl584]

BJ,

The courts don't view college as "optional". They say an education is a "necessity" like healthcare or housing. That's their position.

NJ is actually the only state I believe with this strict of a child support law. I may be on the hook for graduate school too. That's the reality of the law. If you read some legal blogs, lawyers to get clients will say things like:

"Well, don't you want your kids to be successful? Don't you, BJ?"

(well, don't you, BJ?)

That's such a narrow minded view that the courts are taking. I guarantee that someone in this area could go get a job the day after high school working on the gas wells, and will make WAY more money and have a WAY better life than the kid next door that goes off to college, studies basket weaving 101, and ends up as shift supervisor at McDonalds.

I understand your position that as a parent you want to help your kid. I would do the same. But, for the courts to say that college is a necessity is foolish. There are so many useless majors out there that it isn't funny.

[NetSkyBlue]

Wow, that's insane. What if the child doesn't want to go to college? Or screws around and doesn't apply themselves? Can the parents not withdraw tuition support?

To this day I wish I hadn't gone to a traditional state college. Dense as it may sound, it never occurred to me that I had any other option (other than just trying to get a job out of high school). I really wish I had gone to a trade school for CAD or something similar, rather than having my useless (and unused) BA in Spanish.

[Scanner]

I think you just have to learn to let it go (aspirations of saving), when you are divorced.

The State will make sure, especially if you are the non-custodial parent, that you NEVER get ahead. You spend on yourself and it's viewed as questionable.

I am not talking about the father (usually the father) collecting unemployment and then working under the table and then goes out and buys a new pick-up truck. . .I live fairly frugally. . .I could cut out cable, TV, internet but then the kids would complain and whine, eh, you know, these decisions are a struggle.

I think you just have to resign yourself a bit and re-prioritize. . .with me, I have learned it's my health. Really being a health nut lately.

I got a Life Coach (yeah, did the hippy dippy thing there). . .we talk, gets my head on straight, learn to let go, and I got a Vitamix. I would have never spent money on such a quality thing before (it's a $400 blender, pulvarizes the food. . .did know someone who works at QVC who got it for me for $300). Life Coaching would have been an "indulgence" before but with my adult ADD, it really helps me. My ex-wife would have freaked if I reached out to receive help and spend like that.

But now, well, I guess - spending. . .it's my destiny. After all. . .you can't take it with you anyway. Right? I never really wanted to cruise the world like DisneySteve anyway when I retired so it's really okay.

My $300 Vitamix? I LOVE IT! I am now getting 9 servings of fruits and veggies per day now. . .weight is coming off. Back exercising, training hard - swimming, walking, running, some weights.

I stay self-employed. I got a good CPA. Run things like Life Coaching and Vitamix through business. These things help in divorce.

Socking away money? Eh, not so much. It can be raided. If you have money to spend, you have money to spend on kids is the philosophy. You financial health is of no concern. It's only about protecting the taxpayers from having to take care of the kids.

I have officially succumbed to the Spending Economy. I am letting it go.

You savers may all send me a thank you note for fueling your savings.

[scfr]

Sorry Scanner.

One bit of advice based on what my BIL experienced (NY resident). If the court decides you must pay for their college tuition, make sure that it is specified for how long you must pay. max 8 semesters? Until your child is what age? In other words, make sure that you won't end up paying for a "5 or 6 year plan" or a 35 year old who blew off college and then decides to go study underwater basket weaving.

When the kids are old enough, let them know exactly what they can expect from you financially so that they aren't surprised and end up one course short of a degree.

Don't know what your family gift-giving traditions are, but think about asking your side of the family to make contributions to the college fund instead of material gifts for holidays, birthdays, etc.

[jpg7n16]

Before you jump off the saving train -- have your CPA look into a defined benefit plan for your business.

Typically can contribute as much as required by the plan actuary to fund your retirement pension, and I believe that'd be part of the business asset, and not something that can be "raided." Kid will be long out of college by the time you get access to your pension money, so no threat there (at this point).

Save for retirement, avoid raiding of retirement assets, not blowing all your money on things, business tax deductions, lower income - might help you out.


Then just work out helping your kid through college as best you can on your own terms (as much as that's possible).