What Divorced Parents Need to Know About College Planning
By Judd Allen, CDFA® Candidate
If you’re a divorced parent with kids approaching college, the words “FAFSA,” “529 plan,” and “tuition deposit” might make your stomach turn a little. You’re not alone. College planning is complicated enough when you’re married. Add divorce to the mix, and suddenly there are custody rules, financial aid implications, and differing expectations to navigate.
The good news? You can still support your child’s college dreams - without derailing your financial future. But it takes planning, honest conversations, and some coordination (where possible) with your co-parent.
Understand the FAFSA Rules Post-Divorce
One of the most misunderstood areas in college planning after divorce is how the FAFSA (Free Application for Federal Student Aid) treats divorced parents.
As of 2024, the FAFSA only looks at the custodial parent’s income and assets. That’s the parent who provides more than 50% of the child’s financial support - not necessarily the parent the child lives with most of the time.
This can have a major impact on how much financial aid your child is eligible for. If your ex-spouse earns significantly more than you, and you are the custodial parent, that could work in your child’s favor in terms of aid eligibility.
Also:
Child support received is considered income for the FAFSA.
Alimony received may also count, depending on the year the divorce was finalized.
Some colleges also require the CSS Profile, which includes information from both parents regardless of custody. Check each school’s requirements early.
If you’re unsure how this applies to you, speak with a financial professional who understands the intersection of divorce and education planning. Missteps can cost thousands in missed aid.
529 Plans: Who Owns What?
During divorce, 529 college savings plans are often addressed in the settlement - but sometimes they’re overlooked.
Ownership of the account matters. If your ex-spouse owns the 529 plan, and you’re the custodial parent, any withdrawals they make could be considered untaxed income to the student and reduce aid eligibility.
Whenever possible, the custodial parent should own the 529. If that’s not the case, coordinate on the timing of distributions to minimize financial aid impact. And if your child is approaching college age and you don’t yet have a 529, it’s still worth opening one - even a few years of tax-deferred growth can help.
Set Expectations - With Your Ex and Your Kids
One of the biggest pain points for divorced parents isn’t the money - it’s the assumptions.
Maybe your divorce agreement is silent on college costs. Maybe one parent believes they’ll split it evenly, while the other expects their ex to cover the bulk. Or maybe your child thinks their dream school is covered, when you know it’s not realistic.
It’s not always easy to have these conversations, but setting clear expectations now can prevent conflict later. If you can’t afford to cover everything, that’s okay. Be transparent about what you can contribute, and explore options with your child - scholarships, financial aid, community college transfers, or part-time work.
Remember: clarity is more valuable than promises you can’t sustain.
Don’t Sacrifice Your Own Financial Stability
You may feel pressure to “make up for” the divorce by helping your child attend their dream school at any cost. That instinct is human - but it’s also risky.
I’ve seen divorced parents stop contributing to retirement accounts, take on Parent PLUS loans, or even withdraw from their own retirement funds to cover tuition. The cost? A compromised financial future and a much harder road to retirement.
There are other ways to support your child’s education that don’t involve financial jeopardy:
Help them navigate the aid process
Assist with college applications or essays
Research schools with generous merit packages
Encourage them to seek work-study or scholarship options
It’s not just about writing checks - it’s about being involved.
Multiple Kids? Create a Sustainable Strategy
If you have more than one child, you already know: the math gets tricky. Funding college for one student is a challenge. Funding it for two or three? That’s a long-term strategy.
Start by creating individual savings accounts (if possible), and think about your priorities. Equal funding isn’t always feasible - but fairness and communication go a long way. Be honest with your kids about what’s possible and what tradeoffs might be involved.
And don’t forget to coordinate aid applications in years where kids overlap in school. Some aid formulas factor in multiple students in college at the same time - though this is evolving with FAFSA changes.
You’re Still the Parent That Matters
It’s easy to get caught up in the dollar signs. But your child doesn’t just need tuition payments - they need your support, presence, and guidance.
Plenty of parents contribute financially to college and still feel disconnected. Others can’t pay much but are deeply involved in their child’s journey. Wherever you fall on that spectrum, know that what matters most is showing up.
And if you’re rebuilding financially post-divorce? Helping your child doesn’t have to mean giving everything. It just means giving what you can - and planning the rest.
