The Iowa Senate recently introduced bill SF 17 that would alter the legal landscape for postsecondary education subsidies in divorce cases. If passed, under a dissolution of marriage temporary order, final judgment, or decree, SF 17 would prohibit the court from ordering divorced parents to pay for a child’s postsecondary education subsidy. If passed, SF 17 would go into effect on July 1, 2023. Any support order, decree, or judgment providing for a postsecondary education subsidy entered or pending before July 1, 2023, could be modified to accord with the new law.

Current Iowa Post-Secondary Education Subsidy Law

Under current Iowa law, the court can order divorced parents to pay a postsecondary education subsidy if “good cause” is shown. The court considers “the age and ability of the child, the child’s financial resources, whether the child is self-sustaining, and the financial situation of the parents” to determine whether good cause exists. If the court finds good cause exists, it then conducts the following three-step analysis to determine how much the parent(s) must pay:

Cost

1. “The cost of postsecondary education based upon the cost of attending an in-state public institution for a course of instruction leading to an undergraduate degree and shall include the reasonable costs for only necessary postsecondary education expenses”;

Child’s Contribution

2. “The amount of the child's reasonably expected contribution in light of ‘the child's financial resources, including but not limited to the availability of financial aid whether in the form of scholarships, grants, or student loans, and the ability of the child to earn income while attending school’”; and
3. "The court must subtract the child’s expected contribution from the total cost of postsecondary education. The court must then allocate the remaining costs between the parents in an amount not to exceed 33.3% of the total cost of postsecondary education.”

Bottom Line

Unsurprisingly, the current postsecondary education subsidy law has often produced messy and protracted litigation over whether and/or how much a parent should pay for their child or children’s college education. Absent an agreement between parties, the passage of SF 17 would eliminate legal battles over divorced parents’ obligation to pay for their child’s college expenses.