August is off-to-college month. For divorced parents, the joys and sorrows of a child leaving the nest are often compounded by the parents’ disagreement over their division of college expenses.
Last Spring’s decision of the Second Department in Yorke v. Yorke provides guidance. The parties are the parents of a child who entered college beginning in the Fall 2007 semester. By two 2007 orders, the father was directed to pay 83% of the college tuition for the subject child prior to March 2009, and 82% of the tuition thereafter.
Those orders provided that the father was not responsible for contributing towards the child’s room and board at college. This 2011 opinion did not discuss why room and board had been excluded, or the basis for the prospective (2009) change in the allocated percentages.
Instead, this 2010 Family Court, Orange County, proceeding involved only the calculation of the father’s share of tuition. At the heart of the dispute was the effect of the child’s financial aid package, both as it reduced the tuition expense, but also as it was required to be spread over the costs for room and board.
In the order appealed from, Family Court Judge Lori Currier Woods had deducted financial aid, including “Stafford” loans, prior to determining the father’s share of college costs for the child. The appellate court noted, however, that in determining the parents’ respective obligations towards the cost of college, a court should not take into account any college loans for which the student is responsible. Any loans for which the child is responsible is not to be deducted from college costs prior to determining the parents’ pro rata shares of those costs.
In addition, the Second Department held Judge Woods erred when she applied the scholarships, grants, and student loans for which the child is not responsible only against the tuition expense. Rather, the appellate court held, the financial aid package must be applied against tuition, room and board.
The court explained: First, the Family Court should have calculated the total cost of attending college, including tuition, and room and board. Next, it should have determined the percentage of that total cost which was covered by financial aid. That percentage should then have been applied to the tuition portion. Finally, the father’s share of the net tuition, after deducting the pro rata financial aid, should have been calculated based upon his percentage of responsibility.
Clarifying by example, the court explained that if tuition were $12,000 and room and board $8,000, totaling $20,000, and financial aid iwere $15,000, or 75% of the total college cost, the net tuition after pro rata financial aid would be $3,000 (the remaining 25% of the $12,000 tuition cost). The father’s pro rata tuition obligation should then be applied to that net allocated amount to determine his contribution to tuition.
The divorce practitioner might do well to specifically reference the Yorke decision when crafting the language of a settlement stipulation, much as the Majauskas decision (94 A.D.2d 494, 464 N.Y.S.2d 914 [4th Dept. 1983], affirmed 61 NY2d 481, 474 N.Y.S.2d 699 ) is often referenced when dividing a pension. Indeed, specifically reciting the example might aid parents when applying their agreement.