How Co-Parents Can Develop a Plan to Get Their Child a Great Education at a Price They Can Afford

• Identifying the right time to begin financial planning for college.

• Setting priorities for your student’s college choices.

• How to find the colleges most likely to give your child scholarships.

• How to find colleges that are good fits, not just financially but also academically and socially.

• Utilizing a 529 account or a savings account.

• How co-parents can set aside money for a college fund without ruining their retirement.

• How financial aid, merit aid, and scholarships work for co-parents.

• What co-parents should know about the FAFSA.

• How to think about college from the perspective of “why college” and not “which college”.

• …and much more!

If you would like to speak with one of our attorneys, please call our office at (503) 227-0200, or visit our website at https://www.pacificcascadelegal.com.

If you're interested in getting in touch with Ann, you can do so by visiting her website at www.howtopayforcollege.com or by emailing her at hello@howtopayforcollege.com

Disclaimer: Nothing in this communication is intended to provide legal advice nor does it constitute a client-attorney relationship, therefore you should not interpret the contents as such.

Steve Altishin
Wow. That's fascinating. I mean, seriously, because I think people have this assumption that there’s only one path to success, and if their child doesn’t get into a certain type of school, somehow they’ve failed. And that creates a lot of pressure financially and emotionally.

Ann Garcia
It really does. And I think especially for co-parents, one of the most important things is getting aligned around what success actually looks like for your child. Because if one parent is saying, “We’re only going to consider elite private schools,” and the other parent is saying, “We need to keep costs reasonable,” that conflict trickles down to the student.

And students already have enough stress during the college application process. They’re trying to figure out who they are, what they want to study, where they belong socially and academically, and now they’re also trying to manage their parents’ expectations.

So I encourage co-parents to start conversations early and focus first on values rather than institutions. What do we want this experience to accomplish for our child? Do we want them to graduate debt free? Do we want them to have flexibility to pursue graduate school later? Do we want them close to home or farther away? Do we want them in a large environment or a smaller one? Those kinds of conversations are much more productive than immediately jumping into rankings and prestige.

Steve Altishin
One thing that I think surprises people is just how expensive college has become. So when should families really start planning financially?

Ann Garcia
Earlier than they think. Honestly, if you have young children and you know that college is something you want to support financially, starting early gives you more flexibility and more options.

Now that doesn’t mean parents need to panic when their child is five years old. But even small consistent savings can make a meaningful difference over time.

And I want to say something really important here for co-parents specifically: you should not sacrifice your retirement to pay for your child’s college education.

I know parents don’t love hearing that. But there are loans for college. There are not loans for retirement.

So part of responsible college planning is balancing priorities. You want to support your child, but you also need to protect your own long-term financial stability.

Steve Altishin
That feels especially important after divorce because finances may already be stretched.

Ann Garcia
Exactly. Divorce changes the financial picture dramatically for many families. Now there are two households, two sets of expenses, potentially child support or spousal support obligations, retirement accounts being divided, maybe new partners later on. Everything becomes more complicated.

So co-parents really benefit from having honest conversations about what is realistic financially. And ideally, those conversations happen long before senior year of high school.

Steve Altishin
What about savings tools? People hear about 529 accounts all the time. Are those generally a good option?

Ann Garcia
For many families, yes. A 529 plan is specifically designed for education savings, and there are tax advantages associated with using one.

The money grows tax free, and when it’s used for qualified education expenses, withdrawals are tax free as well.

Now whether a 529 is the best option depends on the family’s situation, because sometimes flexibility matters more than tax advantages. But generally speaking, if college is a goal, a 529 can be a very effective savings tool.

And one thing co-parents should discuss is ownership of the account. Who owns it can matter for financial aid purposes and for overall control of the funds.

Steve Altishin
That’s interesting because I think people assume it’s just “put money away for college,” but there’s strategy involved.

Ann Garcia
There’s definitely strategy involved. Especially once financial aid enters the picture.

And honestly, financial aid is one of the most misunderstood parts of the process. People hear “financial aid” and assume that means everything will somehow magically become affordable. But there are different types of aid.

There’s need-based aid, which depends on the family’s financial situation. There’s merit aid, which is based on the student’s accomplishments. There are scholarships from outside organizations. There are loans. There are work-study programs.

And co-parents really need to understand how their financial circumstances affect eligibility.

Steve Altishin
You mentioned earlier that FAFSA rules are changing. Does that create confusion for people?

Ann Garcia
Oh absolutely. The FAFSA process already confuses many families, and changes to the rules add another layer.

One thing I always encourage families to do is not wait until the last minute. The earlier you understand the process, the less overwhelming it becomes.

And especially for divorced or separated parents, communication matters. Because if the wrong parent files or information is misunderstood, it can affect aid eligibility and create unnecessary complications.

Steve Altishin
What do you think is the biggest misconception families have about paying for college?

Ann Garcia
Probably the idea that expensive automatically means better.

Families sometimes assume that if they’re not spending an enormous amount of money, their child is somehow getting a lesser education or lesser future opportunities. And that’s just not true.

The “best” college is the college that is a strong fit academically, socially, emotionally, and financially.

And honestly, one of the biggest gifts parents can give their children is allowing them to begin adulthood without overwhelming debt.

Steve Altishin
That’s huge.

Ann Garcia
It really is. Because student loan debt can shape a person’s life for decades. It can affect career choices, home ownership, relationships, retirement savings, entrepreneurship—everything.

So when families are making college decisions, I encourage them to think long term. Not just “Can we make this work for four years?” but “What does life look like after graduation?”

Steve Altishin
Before we wrap up, if there’s one thing you’d want co-parents listening today to remember, what would it be?

Ann Garcia
I would want them to remember that there are many paths to a successful future.

Your child does not need a perfect college experience. They need an educational experience that supports their growth, their goals, and their long-term well-being.

And when co-parents can work together thoughtfully and realistically around finances and expectations, they give their child a tremendous advantage emotionally and financially.

Steve Altishin
Ann, this has been fantastic. Thank you so much for sitting down and talking with us today.

Ann Garcia
Thank you for having me. I really appreciate it.

Steve Altishin
And thank you everyone for joining us today. Until next time, stay safe, stay happy, and be well.

Outro:
This has been Modern Family Matters, a legal podcast focusing on providing real answers and direction for individuals and families. Our podcast is sponsored by Pacific Cascade Legal, serving families in Oregon and Washington. If you are in need of legal counsel or have additional questions about a family law matter important to you, please visit our websites at pacificcascadelegal.com or pacificcascadefamilylaw.com. You can also call our headquarters at (503) 227-0200 to schedule a case evaluation with one of our seasoned attorneys. Modern Family Matters, advocating for your better tomorrow and offering legal solutions important to the modern family.

Steve Altishin
I would say, Yeah, you look at the Stanford or Texas

Ann Garcia
a&m. Oh, my God, University of Kentucky has the same number of fortune 500, CEO, alumni as Stanford. So,

Steve Altishin
I love that I love that idea of it's not necessarily which college but, you know, while you're going to college, so there's three things that I kind of wanted to talk about, that you've taught me hit. And when it now we're at, where do I put my money? You know, do I just pick up my bank account? Or what do I do? The other one is what you know, if I even with scholarships still need to be a joint loan, borrow, how do I borrow? And then the final one let's talk about is just how do I apply and how I apply make a difference. But to start really quickly, maybe with? Where do I put my money manager in grade school?

Ann Garcia
Yeah, I think the best place to put your money is a 529 college savings plan. So these are state run, tax advantaged college savings accounts. You can invest in any state's plan and use any state's plan at any college. I think our plan here in Oregon is quite good. And you get a you get an income tax credit for contributions to the plan. The way a 529 plan works is you invest after tax money. It's kind of like a Roth IRA. You invest after tax money in many states, including Oregon offer a tax benefit for your contribution, and then your money grows tax free. When you take it out. When you're in college. You do not pay any taxes on that as long as you use it to pay for college expenses. 520 nights are really easy. They have different investment portfolios, you can choose where you can set up your own set of investments or you can choose what's called an age based or a target enrollment portfolio. In one of those you you basically say my kids going to start college this year, and they will allocate your investment portfolio in a risk appropriate way so that you'll have money available when they get to college and they will continually monitor that and re allocate it. What's great about 520 nines is you can set up an automatic monthly and adjustments so that it's very simple and seamless. And the money just comes out of your account before it even gets into your household budget, many of them take very small contributions. So even if you start really small, there's you can always have, you know, have money available there. Another interesting data point that I found is that students who have whose families have college savings for them enroll in and graduate from college at higher rates than those who don't, even if it's a very small amount of savings there, you can say there's probably some chicken and egg there. Because if I set up a college savings account, I'm probably talking to you about going to college and creating that expectation. In your mind. Nonetheless, having college savings produces college graduates,

Steve Altishin
oh, Doug, like you said little bit little bit because especially when they're young, but

Ann Garcia
you know, yeah, and that's, you know, the power of compounding, the sooner you start, the more work your money does, the later you start, the more work you do. The thing that's great about 520 nines is they all have what's called a gifting page, and a gifting page, lets other people contribute directly into your 529. So if you're, you know, if you're overwhelmed with all the toys your kids get, and you really mean it when you say don't give us any more toys, share that gifting page with grandparents, aunts, and uncles, you know, all those people who were who were, you know, dropping Legos on you. I love it.

Steve Altishin
I love it. So to loan to borrow or not to borrow? That is the question.

Ann Garcia
That is the question. And I think there's, you know, I feel like there's so much talk about student loans as kind of a one way ticket to the poor house and, and student loans can can have a reasonable place in in a student's college budget. So there are a few different types of loans available. There are the federal student loans, which you apply for through the FAFSA, and then there are private loans. Within the federal loan programs, there's the direct student loan, and then there's the Parent PLUS loan. The direct student loan is the only loan that an 18 year old can take out without a cosigner and without any credit history. It's there's an annual amount that they can borrow it's so it's it's capped the maximum amount a student can borrow over four years as $27,000. Now, if they were to take out that loan, and that's the only loan they have, that will translate into a monthly payment of about $325 a month for 10 years. And that payment is more than offset by the earnings increase that college graduates should expect. There are a few groups of people who are in trouble with call with student loans. By and large, it is not people who graduate with a bachelor's degree and only the direct student loan, you know, as their as their only debt. The people who are really struggling with loans are people who've gone to grad school, particularly if they had loans from their undergraduate years, because what happens is your loans get deferred while you're in grad school. So your balance grows, because the interest continues to accrue on them. And you're adding new grad school borrowing on top of that. So that's one group of people. Another group of people is is students who start their undergraduate degree program, take out student loans, and then don't graduate from college. So they've got the loan debt, and they don't have the earnings power to deal with it. And the third group is students who borrow to attend for profit colleges. So for profit colleges or all those kind of trade schools and you know, where you go to become a chef or a massage therapist, or, you know, there's it certain certification program type of things. Oftentimes, those degrees are not worth the paper that they're printed on. And yet students can take out can take out student loans to, to attend there. So those are the situations to avoid that. The other thing is for parents, particularly for CO parents, deciding whether or not you're going to take out parent loans versus versus student loans. I always recommend that families start with a direct student loan even if the parents intend to pay it back. And the direct student loan has the lowest interest rate lowest fees, and it can help your student build credit history. By having it not only that, but students incomes are usually lower, so they might get the tax deduction for the interest payment, which translates to about one month's payment every year. But for for CO parents one of the strange one of the weird things that I come across often is one parent files, the FAFSA, and the other plans to make their share of the college to bear their share of the college costs through Parent Plus loans. That is, that is actually how it works. It's still only the one parent filing the FAFSA. And then the other parent just needs to reach out to the financial aid office at the student's college to take out the Parent PLUS loan. I love

Steve Altishin
it. I love it. Wow, we are zipping through. But I do want to talk just for a little bit about the whole application process can be crazy. And or maybe it isn't. People just anticipate that it's gonna be crazy. Can we talk just a little bit about some application hints? Yeah. And you know, what to face?

Ann Garcia
Yeah, I mean, the application process can be really, really crazy. And I think one of the things that you forget about because it gets really exciting to start thinking about college and whatnot, and thinking that it all happens senior year. It is a it's a huge undertaking. And you and your student both also really want to be present for their senior year, senior year is challenging, you're academically fall, at a minimum fall semester still counts for college, they probably have activities they want to participate in, they might have a job, they might have friends they want to spend time with. And so layering college applications on top of that is, can be really challenging. The goodness as the common app makes it really easy to apply to colleges. The bad news is the common app makes it really easy to apply to colleges. So most colleges accept the common app. And that's a single application that the student fills out and submits to multiple colleges. However, it is not simply fills it out and submits it. Every college has their own set of admissions requirements. Many colleges just require the standard Common App transcript, test scores, if needed, FAFSA and the common apps standard essay, their statement statement of purpose. However, most private colleges have supplemental essays, and typically two additional supplemental essays. So for example, when my daughter was applying to colleges, she applied to eight colleges, to Republic six, we're private, some had scholarships that required an additional application, she had 24 essays she had to write. And there was some overlap, you know, where the typical one of the typically one of the essays for the private colleges is, why do you want to go here. And here's a pro tip, don't say because it's a good school, actually come up with something specific about that college that you are interested in and relate it to yourself. So my daughter is at University of Chicago, and they have a wonderful dean of admissions who's just the most entertaining guy. And he said, so they have us Chicago has three essays, which is pretty standard. And he said, here's what we want from each of them. So one of them is the common app statement of purpose. And he said, that's how we figure out who you are. So you need to show who you are. This is not just a resume, it's who are you? The second one is the why do you want to go here? And that's they use that to say, Are you a fit for our school or not. And the third one you Chicago is known for their wacky essays. So it's, you know, they have a variety of prompts. One of them is where's Waldo. Another is come up with a historical mashup. So one of my daughter's college classmates came up with Lebron James Madison, and wrote an essay about LeBron James maps. And he said, and that one is we want to see how you engage with the concept. So think of your essays that way. It's not just I want to go to your college, because it's a good college, and I'm a good student, you know, coming up statement of purpose. Here's a laundry list of everything I've done, and I'm a good student, too. And so think about what you want to do. I'm getting a little bit sidetracked in answering your question about the combination.

Steve Altishin
Really good. That it kind of leads to, we talked about talked about, you know, loaning money or borrowing money, about investing in money about getting, you know, scholarships. Let's just talk for the last couple of minutes about spending money. And you know, you finally get to college. What can parents do to make sure the money lasts?

Ann Garcia
Yeah, well, you know, one of the things that I find is parents consistently underestimate what college will cost. And it's not not knowing how much tuition and room and board are. It's not planning for things like Parents Weekend or study abroad or participating in the Greek system, or, Oh, actually, at this campus, you need a car. So So first and foremost, when your kid is accepted to a college, see if you can join that colleges, Facebook parents, group because Those parents are a fantastic source of information about what college actually costs and what additional things you should you should be be budgeting for as far as making the money last. So I families should plan that they're going to spend their savings down equally over four years, I see a lot of families spend all their savings, and then say, well, we'll just once we get through that, we'll just take out loans for the rest of it. If you do that, chances are that the direct student loan isn't going to be enough. And you're going to be taking out Parent Plus loans, the interest rate on Parent Plus loans is higher than on the direct student loan. So you will actually pay more by delaying and borrowing in Parent Plus loans than you will by starting out early and taking out direct student loans. I think another thing that's really important is to be clear with your student on what your expectations are, as far as who's paying for what, whether it's, you're covering 10% of the cost, whether it's your covering your personal expenses in your books, whether it's we've got tuition, you've got room and board, you know, make sure that that's clear. And not only that, that's clear, but that your student will have money available when they need it, whether it's from a student loan, or from something else. So for example, with room and board, oftentimes, especially if you live on campus, you're paying that money upfront with as part of your tuition payment. And there's there are fees for for getting on a payment plan for that. So unless your student makes enough money in their summer job to cover that, they will have a hard time having that money available when they need it. One of the really important things about paying for college that oftentimes parents don't realize is if they take out student loans, loans are dispersed directly to the college. And I've seen numerous parents who come to me after their student graduates, and they've gotten a notification that it's time to start paying on their Parent Plus loans. And they had no idea that they had taken out Parent Plus loans. But those were part of the student's aid package, the student accepted the aid package, the loan went directly to the college. And, and here we are. So that was I would say that's another thing you can do to manage the cost. Make sure you know what is in your aid package, because colleges do include things like loans and work study as part of the aid package. The other thing as far as managing costs is look at what your options are for expenses. You know, particularly for students who are living on campus, there are oftentimes different price points for housing. And for meal plans. Only one of them is reflected in your offer letter. And it could be the low one, it could be the high one, or it could be the medium one. So you know, make sure you really understand what you're what you're getting into as well. And then also look at what historical tuition increases have been because if tuition is $20,000 this year, and you're like I got it, I can pay $20,000 Every year, if it increases by 6% Every year, that's going to be quite a bit more than 20,000 By the time senior year rolls around. I love it. I love it.

Steve Altishin
But we are out of time. But before we go, please let people know right now how they can get a hold of you. And that you wrote this thing. This was wonderful.

Ann Garcia
Thank you. Thank you. Yeah, so my book is how to pay for college. It's available on Amazon and bookstores anywhere. My website is how to pay for college.com. So that's the easiest place to find me. And if you're a Facebook user, my I'm the college financial lady on Facebook, and you can follow me there as well.

Steve Altishin
I love it. Well thank you. Thank you and for sitting down to talk today about just you know how parents and co-parent can work together to develop a great education plan for their kids and afford it. That is super important. It's one of the biggest things on, especially co parents' minds. And you made it understandable to even someone like me, that is a successful task. So thank you for joining us today.

Ann Garcia
Thank you so much for having me.

Steve Altishin
Oh, you bet. And anyone else. If you have further questions on today's topic, you can also post it here and we can help you get connected with Ann. So until next time, stay safe, stay happy and be well.

Outro:
This has been Modern Family Matters, a legal podcast focusing on providing real answers and direction for individuals and families. Our podcast is sponsored by Pacific Cascade Legal, serving families in Oregon and Washington. If you are in need of legal counsel or have additional questions about a family law matter important to you, please visit our websites at pacificcascadelegal.com or pacificcascadefamilylaw.com. You can also call our headquarters at (503) 227-0200 to schedule a case evaluation with one of our seasoned attorneys. Modern Family Matters, advocating for your better tomorrow and offering legal solutions important to the modern family.