Private Student Loans and College Support Agreements

In the 21st century more than half of all marriages end in divorce. In some situations, the fact that parents have divorced can cause some problems and confusion for children of divorced parents who are in need of financing for their ongoing educational needs. Through this article, you are provided with some basic information associated with college support agreements arising out of a divorce and private student loans.

Once you understand the information and materials that are presented to you in this article you will be in a perfect position to make intelligent decisions in regard to your educational financing options. You will be able to access the educational financing options that will best serve your needs today and into the future.

Wise parents who are heading into divorce are those individuals that prepare a written college support agreement in addition to a child support agreement. Such an agreement should specify who is responsible for how much of the college expenses, how many semesters of support will be provided, any limits on annual payments, indexing payments to the tuition at a particular college (for example, a state college), whether there is an age limit (for example, up to age 24, when the student becomes automatically independent), and any restrictions on colleges the child may attend (for example, specific colleges and accreditation).

The agreement should also specify what constitutes college costs (i.e., just tuition and required fees, or also room and board, transportation, health insurance, textbooks and other educational expenses) and whether there are any requirements the child must satisfy to receive continued support, such as achieving a minimum GPA and taking a minimum number of credit hours. The agreement should also specify whether the college support is to be paid directly to the school, to the custodial parent, to the child, or to a combination. Often the percentage of college costs is divided proportionately between the parents according to income after subtracting non-discretionary expenses such as taxes, basic living expenses and health care.

The reason that a college support agreement is essential rests in the fact that generally speaking a child support agreement comes to an end when the child reaches the age of eighteen (or one year later if that child has yet to complete high school). Therefore, there will not be any provision for parental support of a college education in a typical child support agreement.

Once this agreement is in place, an effort can be made to determine an overall college financing package. This can include a private student loan – a private student loan that is taken out by the student or even by the parent who is attempting to finance the educational requirements set forth in the college support agreement. In the end, the private student loan can be perhaps the most effective tool for ensuring that a student’s overall educational goals fully are funded today and into the future.