POSTSECONDARY EXPENSES POST CHALAT:
Orders and Agreements to Pay College Expenses After Divorce.

By Robin Lutz Beattie and Amy Shaw

INTRODUCTION

This article discusses the manner in which parties may agree to pay postsecondary educational expenses for their children in a Separation Agreement, the efficacy of such an agreement, and the means by which an agreement or order to pay postsecondary educational expenses may be modified.

RELEVANT HISTORY

Between 1990 and 1994, the General Assembly modified provisions concerning postsecondary education expenses, now codified at C.R.S. § 14-10-115(13)(b) and § 14-10-115(15), on a yearly basis. These changes are detailed in In Re the Marriage of Chalat 1 and Postsecondary Education Costs: Forging Through a Legislative Labyrinth, by Helen Shreves and Richard Harris. 2

Until 1997, courts had the authority to order that parents pay reasonable postsecondary expenses whenever "appropriate," although not beyond a child's twenty-first birthday 3. For the most part, case law decided before 1997 addressed the question of when a party's obligation to pay postsecondary educational costs would terminate. In In re the Marriage of Plummer, decided in 1987, the Colorado Supreme Court determined that unless parties agreed to pay support for an emancipated child before the child reached the age of emancipation, parents had no legal obligation to support "a capable, able-bodied young adult [who] chooses to attend college after reaching the age of majority." 4 In In re the Marriage of Huff, issued in 1992, the Colorado Supreme Court determined that a Court could order parties to pay postsecondary educational expenses for a child after he reached the age of emancipation, if the order was issued before the child reached the age of emancipation.5

In 1997, the General Assembly made a drastic change to the provisions concerning postsecondary education expenses. Courts were stripped of the authority to order parents to pay these expenses for their children following a dissolution of their marriage. However, parties have always maintained the right to agree to pay their children's college costs in a separation agreement or stipulation.6

PAYMENT OF POSTSECONDARY EDUCATIONAL EXPENSES PURSUANT TO C.R.S. § 14-10-115

Currently, C.R.S. § 14-10-115 contains two provisions concerning postsecondary educational expenses. Section 14-10-115(15) applies to child support orders "established or modified" before July 1, 1997, and § 14-10-115(13) applies to child support orders entered on or after July 1, 1997.

For child support orders entered before July 1, 1997, a court can require parents to pay "reasonable" education expenses for a child if the court finds that such contributions would be "appropriate." 7 The court cannot order that a parent pay more for these educational expenses than he or she would be required to pay as and for child support under the statutory guidelines, and the order cannot extend beyond the child's twenty-first birthday.8

Section 14-10-115(13)(a), concerning emancipation, applies to child support orders established on or after July 1, 1997. Section 14-10-115(13)(a) provides that children are emancipated at the age of nineteen, unless one of the conditions enumerated in the section exists.9 Under no circumstances can the court order parties to pay for post-secondary educational expenses. Parties can enter into an agreement to pay their children's college costs, which agreement will be enforced in accordance with C.R.S. § 14-10-112, governing separation agreements.10

AGREEMENT TO PAY POSTSECONDARY EDUCATIONAL EXPENSES

Separation agreements have long been an alternative to an adjudication of marital affairs. Unlike settlement agreements entered in civil suits, certain provisions contained in separation agreements are not binding upon the courts. A separation agreement is only a contract until it is incorporated into a decree of dissolution of marriage-at that point, the separation agreement is a judgment, not a contract.11

This principle is codified at C.R.S. § 14-10-112(5), which provides that terms of the separation agreement "set forth in the decree may be enforced by all remedies available for the enforcement of a judgment, including contempt, but are no longer enforceable as contract terms." The statute further provides: "[e]xcept for terms concerning the support, the allocation of decision-making responsibility, or parenting time of children, the decree may expressly preclude or limit modification of terms set forth in the decree if the separation agreement so provides."12 Thus, a decree may not limit modification of terms concerning child support, parental responsibilities or parenting time, despite the parties' wishes as expressed in a separation agreement.

In addition to statutory mandate, public policy and principles of contract law buttress a trial court's retention of jurisdiction over child support, parental responsibilities, and parenting time. It is the stated policy of the State of Colorado "that the needs of the children in a dissolution proceeding are paramount."13 Child support is the benefit of the child, not the parent.14 Because provisions of separation agreements concerning child support affect the children, who are technically third parties to the agreement, the court is not bound by these provisions.15

MODIFICATION OF POSTSECONDARY EDUCATIONAL EXPENSES

In In Re the Marriage of Chalat, the Colorado Supreme Court considered the enforceability of a promise to pay postsecondary education expenses.16 The parties had entered into a Separation Agreement in 1984, resolving all matters at issue in the dissolution of their marriage.17 As part of that agreement, the father promised to pay his daughter's college expenses.18 The agreement was modified as to child support in 1994, but did not address or modify postsecondary education expenses.19

Shortly after the parties' daughter started college in 2001, the father moved for a determination of his continuing responsibility to pay her college expenses.20 Father's motion was based solely upon a legislative change and he did not allege that the parties' circumstances had changed. Father argued that the provisions of C.R.S. § 14-10-115, as amended in 1994, should apply to his payment of the college expenses. If the provisions of the statute as it existed in 1994 were applied, the father's obligation would have been substantially less than his obligation under the 1984 Separation Agreement, because the statute capped his obligation for college expenses.

The trial court found that the provision concerning postsecondary education expenses in the 1984 Separation Agreement was contractual in nature and could not be modified.21 The trial court further found that even if the provision were modifiable, father was not entitled to a modification because he failed to show a substantial and continuing change of circumstances that would justify the modification. Based upon those findings, the trial court held father to the promise he made in the Separation Agreement and ordered him to pay his daughter's tuition, room, board, books and fees.22

Father appealed the trial court's ruling, arguing that postsecondary education support orders entered before July 1, 1997 are modifiable and no showing of changed circumstances is required. The Court of Appeals agreed with father and held that the trial court should have applied the statutory cap contained in the child support guidelines to the father's obligation for postsecondary education expenses.23

The Colorado Supreme Court agreed that postsecondary education support orders are modifiable, but disagreed that no showing of changed circumstances was required. The Colorado Supreme Court reasoned that since father's agreement to pay his daughter's college expenses was adopted by the trial court and incorporated into the court's decree of dissolution, the trial court retained jurisdiction to modify its orders concerning the daughter, including father's obligation to pay postsecondary expenses. It held that a "promise to pay . postsecondary education expenses is not enforceable as a contract term."24 An agreement to pay for postsecondary education will remain modifiable in the same manner as child support, indefinitely.

The Colorado Supreme Court held that absent the narrow exceptions provided in C.R.S. 14-10-122, the court's continuing jurisdiction to modify postsecondary education support orders is only invoked upon a showing of substantial and continuing changed circumstances by the party seeking modification.25

SUBSTANTIAL AND CONTINUING CHANGE

The Chalat decision begs the question of what constitutes substantial and continuing changed circumstances when applied to postsecondary educational expenses. With respect to modification of a monthly child support obligation, there is a specific test. When the application of the child support guidelines causes a change in the support obligation of at least ten percent, the result is a per se substantial and continuing change of circumstances. 26 An agreement to pay postsecondary educational expenses, however, may not necessarily be predicated upon the child support guidelines. Often, parents agree to each pay a specific percentage of the expenses, to divide the expenses in proportion to their incomes, or to pay an enumerated sum of money each year toward their children's college expenses.

Although courts generally hold that there has not been a substantial and continuing change sufficient to justify a modification of support unless the parties' support obligation would change by at least ten percent, there is an exception to this rule. In In Re the Marriage of Ford, the trial court concluded that the mother was entitled to an upward modification of child support even though application of the child support guidelines would not have changed the father's child support obligation by more than ten percent.27 The trial court reasoned that the guidelines establish a rebuttable presumption of appropriate child support, not a conclusive presumption.28 It determined that the mother's poor medical condition, concomitant medical expenses, and loss of employment constituted a substantial and continuing change in her financial circumstances. According to the trial court, the circumstances warranted a deviation from the child support guidelines in that the court could modify child support without the showing of a ten percent change. On appeal, the Colorado Supreme Court affirmed the trial court's decision, noting that pursuant to C.R.S. § 14-10-115(1)(b), now codified at § 14-10-115(2)(b), a court must consider "all relevant factors," including the financial resources of the custodial parent, to determine the appropriate award of child support.29

The factors enumerated in C.R.S. § 14-10-115(2)(b) include:

(I) The financial resources of the child;
(II) The financial resources of the custodial parent;
(III) The standard of living the child would have enjoyed had the marriage not been dissolved;
(IV) The physical and emotional condition of the child and his or her educational needs; and
(V) The financial resources and needs of the noncustodial parent.

Arguably, the application of these factors to the circumstances of the party seeking a modification must serve as a guide to defining a substantial and continuing change of circumstances in the context of postsecondary educational expenses.

CONCLUSION

As family law practitioners well know, a separation agreement often is the culmination of a series of negotiations. A practitioner should advise clients that the terms of the agreement with respect to college expenses are subject to future modification. Accordingly, an agreement to pay college expenses should not necessarily be an essential negotiated term. If reliance upon an agreement to pay college expenses is a fundamental component of an agreement, a client should bear in mind that it may be subject to future modification.

The concept of "substantial and continuing change" is amorphous when applied to a future obligation such as the payment of college expenses. The more definite the obligation in a separation agreement, the more straightforward the test of a substantial and continuing change would be. To reduce the probability of future modifications to an agreement to pay postsecondary educational expenses, practitioners are advised to recommend that their clients identify and fund a particular account, in a particular amount defined in the separation agreement, for the payment of their children's postsecondary educational expenses. It may also be advisable to recommend that parents limit their obligation to a specific figure or use Colorado state school tuition as a defining measure. For example, the agreement could state that the child may attend any college of their choosing, but the parent's obligation is "capped" at a rate comparable to the tuition at the University of Colorado.

Examples of issues that should be discussed with your client include, but are not limited to: whether the child's grades affect the parent's obligation; whether room and board will be paid together with tuition; whether transportation costs will be considered; whether private or out-of-state schools will be recognized or considered; how many years the obligation lasts; whether there is an age limit for the child's attendance; and whether the child must contribute towards any of the expenses. Because this area is a Pandora's Box, counsel must advise parents regarding these considerations. If a parent chooses to be obligated to pay postsecondary education expenses in a Separation Agreement, the obligations should be set forth specifically and clearly.

1 In re Marriage of Chalat ,112 P.3d 47, 50-51 (Colo. 2005).
2 Helen C. Shreves & Richard A. Harris, Postsecondary Education Costs: Forging Through a Legislative Labyrinth, 24 Colo. Law. 43 (Jan. 1995).
3 C.R.S. §14-10-115(13)(Supp.1991).
4 735 P.2d 165, 166, 167 (Colo. 1987).
5 834 P.2d 244 (Colo. 1992).
6 In re Marriage of Chalat, 112 P.3d 47, 51 (Colo. 2005); see also C.R.S. §14-10-115(13)(b).
7 C.R.S. §14-10-115(15)(c).
8 C.R.S. §14-10-115(15)(c); C.R.S. §14-10-115(15)(e).
9 C.R.S. §14-10-115(13)(a)(I)-(V).
10 C.R.S. §14-10-115(13)(b).
11 Chalat, 112 P.3d at 52 (citing C.R.S. § 14-10-112(5); In re Marriage of Manzo, 659 P.2d 669, 671 (Colo. 1983)).
12 C.R.S. § 14-10-112(6).
13 In re Marriage of Ikeler, 161 P.3d 663, 670 (Colo. 2007) (citing Chalat, 112 P.3d at 53).
14 In re Marriage of Aldrich, 945 P.2d 1370 (Colo. 1997).
15 See Chalat, 112 P.3d at 53; see also In re Marriage of Johnson, 591 P.2d 1043 (Colo. App. 1979).
16 Chalat, 112 P.3d at 53.
17 Chalat, 112 P.3d at 49.
18 Chalat, 112 P.3d at 48.
19 Chalat, 112 P.3d at 49.
20 Chalat, 112 P.3d at 49.
21 Chalat, 112 P.3d at 59.
22 Chalat, 112 P.3d at 50.
23 In re Marriage of Chalat, 94 P.3d 1991, 1194 (Colo.App.2004).
24 Chalat, 112 P.3d at 52.
25 In re Marriage of Chalat, 112 P.3d 47, 58 (Colo.2005).
26 Id. at 58, citing In re Marriage of Pugliese, 761 P.2d 277, 278 (Colo.App.1988).
27 In re Marriage of Ford, 851 P.2d 295 (Colo. App. 1993).
28 Id. at 297.
29 Id. at 298; see also C.R.S. § 14-10-115(2)(b).

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