After A Divorce in New Jersey, Is A Parent Automatically Responsible For Paying Their Child’s Student Loans?
While it is true that parents are responsible to contribute to their child’s college expenses, they are not responsible to pay off student loans unless they agreed to do so as part of their New Jersey divorce settlement. A seasoned divorce lawyer understands that this issue must be addressed in any Property Settlement Agreement. That was illustrated in the new case of Haymaker v. Haymaker. Let’s take a closer look.
In the case the parties were married and had two children together. They divorced in September 1996, each represented by an attorney. Their second child started her college career at Syracuse University in August 2012. After the parties divorced, until August 2011, the child lived primarily with her mother. However, in September 2011, the father motioned the court to be the primary residential parent. The motion was granted and from that point on, the child and her mother had a strange relationship.
When the mother found out that the child was going to be living with her father instead, she called the Ventor Board of Education to let them know that the child was no longer living in the school district. As a result, the board of education sought tuition reimbursement for the child’s “ineligible attendance” in the Ventor School District during her final year of high school. However, the court amended its September 2011 order to clarify that the child was still maintaining a residence at her mother’s home during the school year. Therefore, she was legally enrolled in the Ventor School District.
In July 2012 the father filed a motion seeking an order determining a proportionate share of college contribution from the mother. Additionally, he sought additional child support to cover costs unassociated with college expenses. One month later, the court entered an order directing the mother to pay $125 per week in child support, yet she appealed. A year later, the motion judge issued a final decision ordering the mother to pay $103 per week in support. Yet, she appealed again.
On appeal, the mother argued that the trial court erred in requiring her to contribute to college expenses by improperly evaluating the Newburgh v. Arrigo factors. The Appellate Division looked to the twelve Newburgh factors to begin its analysis. The court noted that while there is no set formula to determine a parent’s contribution, the Newburgh court held that the following twelve (12) factors would be considered:
1. Whether the parent if still living with the child would have voluntarily contributed to the cost of the college;
2. The impact of the background, values, and goals of the parent for his or her child to engage in higher- level education;
3. The amount of money the child is seeking from the parent;
4. The ability of the parent to pay that amount;
5. The relationship of the requested contribution to the choice of the school (private or public) and course of study sought by the child;
6. The financial resources of both parents;
7. The ability of the child to perform well in the higher-level education;
8. The financial resources of the child, including assets owned individually or held in trust;
9. The ability of the child to earn income during the school year or on vacation;
10. The availability of financial aid to the child;
11. The child’s relationship to the paying parent, as well as the child’s openness to parental; and
12. The relationship of the education sought to the long-term goals of the child.
After reviewing Newburgh, the Appellate Division found that the trial court properly evaluated each of the twelve factors. However, the court stated that the trial court erred in finding that the mother was responsible to pay off her daughter’s student loan for $8,218. The Appellate Division stated that the trial court improperly determined the student loan to be an out-of-pocket expense, one that the parents were responsible to pay for. The court instead held that the daughter was the borrower and the individual principally obligated to repay the loan. Accordingly, the Appellate Division reversed the findings of the lower court.
The main takeaway from Haymaker is that parents are not responsible to pay off their child’s student loan. Although a “college expense," the child is the primary person responsible to pay off any debt he or she incurs. To discuss this issue further, please feel free to not hesitate to give my office a call.