One of the biggest costs involved with raising a child is paying for his or her college education. Tackling those costs might be a little more straightforward for married couples than for divorced parents, though. This is why some parents in Minnesota choose to address how to pay for future college costs during the divorce process.
For the 2018-2019 school year, the average annual tuition at a public four year university was $10,230 — up 7% from the year before. That same year, it cost $36,890 to attend a private university. One of the first things divorcing parents may want to discuss is whether they will cap their contributions to their child’s education. If both parents agree to capping those contributions, it could be helpful to establish a 529 savings plan to which both can deposit money for tuition.
Using a 529 savings plan could be risky if one parent is financially irresponsible. It is not unheard of for one parent to drain the account, leaving nothing behind for when a child is ready to attend school. One solution would be to insist that the savings plan be in the other parent’s name with the intended child named as the beneficiary.
Most parents would agree that making sure their kids have access to a good education is important. Unfortunately, many overlook the reality of paying college tuition. Since Minnesota couples already have to tackle difficult financial conversations during divorce, it might actually be an ideal time to work out how to pay for college.