Divorce = greater financial burden for college students?

Interesting research from Rice University released today that the financial burden of paying for college is greater for those students who come from divorced or remarried parents. Here’s a link to the study: Contributions to College Costs by Married, Divorced, and Remarried Parent.

There are some curious figures, however, that make me think the researchers haven’t really thought through the issue…
For example, the research shows that divorced parents only have half the income, on average, of married couples. I realize that statistical data shows that divorced women, in particular, have lower incomes in the aggregate, but it seems to me that their combined gross income shouldn’t be so dramatically lower. Remarried parents, however, have “similar” incomes to married parents. What am I missing here? Or did their statistical sample turn out to include a lot of women who are stay-at-home moms? (something that I would expect is less likely if they’re divorced than if they’re married)

Here’s perhaps the most salient paragraph:

“The researchers discovered that married parents contributed about 8 percent of their income to their child’s college costs and met 77 percent of their children’s financial needs; divorced parents contributed about 6 percent of their income and met only 42 percent of their children’s financial needs; remarried parents contributed only 5 percent of their income and met 53 percent of their children’s needs.”

One obvious factor that’s not mentioned here is that divorced and remarried parents have more than a single household to manage, so again, they’re comparing gross revenue, not net after household and living expenses. Could this be a fundamental flaw in their analysis?

Quite possibly. Their conclusion of the cause of this difference? “This could be because remarried parents face a whole other set of obligations. Often, there’s a whole other family to consider and step kids. With that, resources are diluted.”

Think about it, though. Let’s say that we are looking at gross revenue. Let’s say I earn $50K/year after taxes, and that my ex also earns $50K/year. Let’s further posit that each of our houses costs $2500/mo, between mortgage, insurance, utilities and miscellaneous. If we’re together, then we have $100,000 – ( 12 * 2,500) or $70,000. Split that into two households, however, and now we’re looking at $100,000 – (12 * (2,000*2) ) or only $40,000. Let’s split that across my three children and divide it back out and that means that each of us only has ( $40,000/12 ) / 3 = $1,100/month to devote to our children’s college expenses, if we have zero additional expenses.

Of course, that $50,000/year goes to a lot more than just household expenses, so realistically I should double it, meaning there’s about $500/mo left over for each child if we are split into two households, versus $1000/mo if we’re together.
I don’t need to say that $500/mo doesn’t go far in the modern world of higher education either, but still, $6000/yr is unavailable simply because of two households instead of one…

De facto, having to cover more households – e.g. parents being split across more than one residence – has a higher expense and therefore means there are less available resources for helping children through college.

But that’s my quick analysis of their research and conclusions. What do you think?

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