The media has recently been full of stories regarding the rich and famous taking extraordinary measures so that their children are accepted into the “best” colleges. Their actions include bribing school officials, coaches, and hiring “smart” people to pose as their children and take the SATs. I think that if you are fabulously wealthy you can already provide your children with many advantages, and don’t need to face prison to make their way into life easier.
However, even average families will take extraordinary measures so that their children can attend the school that either the child has fallen in love with or the school the parent thinks will put their child onto easy street. When families are apart, courts often become involved in making these decisions. Under New York law , when determining support, a court can also add on the expenses of higher education, “having regard for the circumstances of the case.” There are many factors that will be considered such as the income and assets of the family, support payments, and the ability of the child.
What happens when a family has already made a decision about college and are then going through a divorce?
In a recent case , the parties were going through a divorce after a 25-year marriage. Paternal Grandpa had set up college savings accounts that helped defray their children’s college costs. The third child wanted to attend a college which exceeded Grandpa’s money. The parents told the child that if she wanted to attend this college, she would be responsible for the additional cost. However, the Husband, unbeknownst to the Wife, took out student loans in the amount of $154,000 to enable this child to go to her school of choice. Grandpa helped Dad make payments for several years, but was then unable to do so. The loan went into default and another $43,000 accrued in fees and collection costs.
At the time of trial, the Father argued that the debt was a family debt and therefore the Mother should also be responsible. As the Mother had no knowledge of the loan until the divorce, and the Father had listed it as his obligation, the Court held that she was not responsible.
I imagine Dad is not too happy about walking away with a debt of almost a quarter of a million dollars!
When helping your children choose college, keep in mind that you do not know where life will take you- divorce, illness, or losing a spouse is [sadly] always a possibility. Therefore, take cost into consideration. If you decide to co-sign a loan, keep in mind that the primary borrower (even your own child) may not actually pay it back. In this case, it is not two people paying back this debt, but an individual, and probably not something Dad wanted to be saddled with at mid-life.

April 2019 Margaret Tabak

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