The News Story: 3 Important College Funding Questions to Answer During a Divorce
It’s back-to-school time, and most parents with children in college are already wondering how to pay the bills. For single parents, the picture is likely even more complicated.
U.S. News and World Report offers those going through a divorce some tips on college-related finances. First, the story advises, think about who will “‘own’ the 529 plan.” One advisor recommends that the noncustodial parent take ownership of these college-savings assets, as that parent’s finances are typically not required for financial-aid determinations. Similar questions are which parent claims the child for tax purposes, and which gets custody. For custodial parents considering remarriage, the story advises that the new spouse’s finances will also be taken into account for financial-aid purposes.
But research reveals that such tips, though perhaps helpful, can do little to address the underlying disparity of resources between married and unmarried parents.
(Source: “3 Important College Funding Questions to Ask During a Divorce,” August 19, 2015.)
The New Research: Paying for College—When Do Parents Help Most?
Policymakers have devoted considerable effort to creating public programs to help young people pay for college. But given the inevitable limits of such programs, thoughtful Americans should consider a study recently completed by a team of researchers from Syracuse University and the Universities of Florida and Pennsylvania, a study compellingly documenting the considerable advantage young people from intact families enjoy when it comes time to pay for college.
Scrutinizing data collected from 5,070 children from 1,519 families, all reaching age 18 between 1968 and 2000, the researchers begin their work with a preliminary investigation of how family structure affects the likelihood that children will even attend college. Their data indicate that “the probability of attendance is very sensitive to parental configuration and the predicted effects are large. Children with two biological parents are more likely to attend college . . . than those with a stepparent or no parent.”
As it turns out, children from intact homes receive significantly more financial support in covering college expenses. And the difference in parental support in covering college costs is not trivial: the researchers calculate that “family membership accounts for about 60% of the variance in payment of college costs.”
Still, the gap in parental support varies according to type of non-intact household college students come from. “Having no father (i.e., [being from] a mother-only household) reduces support much more than having no mother (a father-only household),” the researchers explain. Compared to peers from intact two-biological-parent homes, college students from stepfamilies also receive significantly less parental support. However, the size and type of deficit in parental support depends on the type of stepfamily a student comes from: “Having a stepmother is associated with significantly lower support for both tuition and room and board, while having a stepfather reduces room and board expenditures only.”
The researchers regard their findings for stepchildren as especially remarkable, given that “the large increase in divorce and remarriage over time in the United States has produced more families that include stepparents and stepchildren as well as more blended families in which all the children do not share the same biological or step relationship to their parents.”
In interpreting their findings, the researchers note a 2011 study likewise concluding that “biological two-parent families contribute more to children’s college costs than either stepparent families or divorced parents.” The authors of that study calculate that “remarried parents . . . contributed 5% of their income [to supporting children in college] compared to 8% for biological two-parent families.”
The researchers also cite as relevant a 1991 study finding that, compared to married parents, “unmarried parents are more likely to see government, instead of the student or parent, as responsible for college funding.” The authors of this study indeed report that, compared to married parents, unmarried parents are “less able to pay and, in fact, had saved less money for their children’s college attendance.”
No doubt, policymakers will continue to tinker with interest rates on student loans. But this new study makes clear that, regardless of where those rates end up, students are likely to struggle to meet college costs if their parents have parted.
(Source: Bryce J. Christensen and Nicole M. King, “New Research,” The Family in America, Fall 2013, Vol. 27 Number 4. Study: John C. Henretta et al., “Family Structure and the Reproduction of Inequality: Parents’ Contribution to Children’s College Costs,” Social Science Research 41.4 : 876-87.)