Most Marital/Property Settlement Agreements (“PSA”) address the cost of a college education for the parties’ child(ren) by often including language that the child is required to apply for all available financial aid, student grants and loans. The issue of student loans was one issue addressed in an unpublished decision by the New Jersey Appellate Division via an opinion in the case of M.F.W. v. G.O. recently decided.
In M.F.W. v. G.O., the parties divorced in 2003 and their PSA indicated that the child would apply for all loans, grants, and scholarships available to her. When it came time for the child to attend college, the parties were not on the same page with regard to payment of college expenses and an application for enforcement was filed with the Court.
The Appellate Court held that is was “repugnant” to require the child to apply for all loans, grants, and scholarships available to her as the child was not a party to the parents’ PSA and the parents have a legal obligation to support her. As such, the Court refused to enforce this provision of the Agreement.
While this case is not precedential, it certainly raises a number of issues such as (1) the treatment of intact families versus non-intact families, (2) whether you can make your child take out loans and if you have to pay them and (3) does it matter what the financial resources of the parents are when determining if the child should be obligated to obtain loans.
Written by Alison Weinroth – Head of The Family Law Department