Opinion ID: 1936974
Heading Depth: 2
Heading Rank: 2

Heading: Determination of the Postsecondary Education Subsidies

Text: The court of appeals determined Robert should pay Anthony and Angela postsecondary education subsidies of $25 a month, each, excluding the months of June, July, and August. Deborah claims the court of appeals miscalculated these subsidies because it considered a parent loan in Anthony's financial aid award notification as an expected student contribution. Neither party disputes that Anthony and Angela meet the basic qualifications for a postsecondary education subsidy. Both children appear to be full-time college students between the ages of eighteen and twenty-two. Iowa Code § 598.1(8). In order to determine whether there is good cause to award a postsecondary education subsidy in this case, we must first point out the meager means of the parents. See id. § 598.21(5A)( a ) (in determining good cause, court must consider, among other factors, the financial conditions of the parents). The court of appeals found Both Deborah and Robert are of modest means and have modest incomes. Tax returns entered as exhibits show that in 2001 Deborah had an adjusted gross income of $21,381. She had state, social security and self-employment tax liability in that year of $2,816. She owed no federal income tax because she was entitled to education credits in the amount of her tax. She received earned income credit of $1,104 and receives about $3,600 a year in child support. This means Deborah would have had $24,004 of disposable income in 2001. At trial Deborah testified she had earned about $31,800 in 2002. We therefore assume her 2002 financial situation is as good as or better than it was in the previous year. She shows a net worth of $3,227. Deborah has one minor child in her home and she provides the support for the child that is not met by Robert's contributions. In 2001 Robert had adjusted gross income of $23,171. In 2001 he paid about $3,954 in federal, state, social security and Medicare taxes. Robert pays $299.85 a month as child support for the parties' youngest child and pays $264.60 a month to maintain health insurance on all the children, for an annual monetary contribution to the children of $6,720.... Robert's tax and family obligations total about $10,674. This leaves him with disposable income of about $12,497. Deborah testified Robert's income for 2002 was $21,000. We assume that his financial situation is no better for 2002 than it was for the prior year. Robert is married and lives with his wife, who is employed and shares living expenses. The only assets he shows are a 1989 Chevrolet truck with 174,000 miles, a bank account of $130 and furniture worth $50. Based upon these findings, which neither party challenges, we conclude that while there is good cause for a modest postsecondary education subsidy, the children will have to pay for substantially all of their college educations. We cannot construe the statute to require these particular parents to pay more than a modest share, even if it means the children will not have sufficient funds to complete college in the traditional four years or without working or borrowing. Having determined there is good cause for a modest postsecondary education subsidy, we employ the following analysis: [we must] first determine the cost of postsecondary education based upon the cost of attending an in-state [undergraduate] public institution. [Iowa Code] § 598.21(5A)( a )(1). The cost must include the reasonable cost for only necessary postsecondary education expenses. Id. After this cost component is determined, the court must next determine the amount the child may reasonably be expected to contribute to the payment of the costs in light of the child's financial resources. Id. § 598.21(5A)( a )(2). In determining a child's financial resources, the court considers the availability of financial aid whether in the form of scholarships, grants, or student loans, as well as the ability of the child to earn income while attending school. Id. The subsidized amount subject to apportionment among the parents is then determined by subtracting the amount of the child's expected contribution from the postsecondary education expenses. Id. § 598.21(5A)( a )(3). However, an amount apportioned to a parent cannot exceed one-third of the total postsecondary education cost. Id. In re Marriage of Vannausdle, 668 N.W.2d 885, 888 (Iowa 2003). According to two documents, each entitled 2001-02 University of Iowa Revised Award Notification, the estimated cost of attendance for each child at the University of Iowa during the 2001-2002 school year was a little more than $12,000. This sum included tuition, fees, books and supplies, room and board, personal expenses, and transportation. See id. at 889 (recognizing the actual and necessary costs of attending college exceed tuition, books, supplies, and a room and board plan, and incorporating personal expenses and transportation into those costs). As previously indicated, given the financial conditions of the parents, the children will be expected to pay substantially all of this cost. In examining sources of funds the children might be expected to contribute, there is no evidence in the record either child received any scholarships, or has sufficient funds saved to cover the costs of their educations. Cf. id. at 887 (scholarships); Rosenfeld, 668 N.W.2d at 846 (funds gifted to student under the Uniform Transfers to Minors Act (UTMA) sufficient to cover costs of her college education). Both children, however, were given over $2200 in federal and state grants. In addition, Anthony was offered a $3500 federally subsidized Stafford loan, while Angela was offered $2625. Again, given the meager financial situations of the parents, it is not unreasonable to expect Anthony and Angela to assume responsibility for repayment of these loans. Cf. Vannausdle, 668 N.W.2d at 890 (loans should have been excluded from the student contribution component of the formula .... Implicit in the parties' approach is their mutual understanding ... loans should not be used to reduce their respective subsidy.). For similar reasons, Anthony and Angela must be expected to work during the school year and summers to help finance their educations, and it appears both do so. Deborah testified Anthony worked twenty hours a week at the hospital as part of his work-study, and Angela worked full-time, earning $7.50 per hour at Wal-Mart. It is not unreasonable to expect both children to work at least part-time during the school year and full-time during breaks and the summer months. In doing so, both children can be expected to earn a substantial amount of money for college. [3] In arriving at the expected contributions of the children, we do not consider the University's award of $3398 to Anthony, and $5213 to Angela, of a PLUS (Parent) Loan. These awards are, in truth, merely offers for Deborah or Robert to assume loans, and therefore are possible parental, not expected student contributions. In re Williams, 253 B.R. 220, 222 n. 8 (Bkrtcy.W.D.Tenn.2000) (The Federal PLUS (Parent Loan for Undergraduate Students) program provides a low-cost financing option to help families fund the college education of a dependent student. The program allows parents to borrow up to the total cost to attend school less other financial aid received. (Emphasis added.)). Subtracting the children's expected contributions from the postsecondary education expenses, we determine each child ought to be subsidized $300 per year by Robert. Robert's obligations to each child shall henceforth be paid in two equal installments of $150. The subsidies shall be payable to the respective child, his or her educational institution, or both, on August 15 and January 15 of each year. See Iowa Code § 598.21(5A)( b ); Longman, 619 N.W.2d at 371. Because Deborah is not presently under any legal obligation to pay a subsidy, until her responsibility is determined her contributions are wholly voluntary, and she is not entitled to any reimbursement. Longman, 619 N.W.2d at 371. The subsidies awarded herein shall begin with the 2002-03 school year. Prior to the filing of this action Robert was under no obligation to subsidize his children's postsecondary education expenses; the subsidy we award to the children begins with the 2002-03 school year because this action commenced in July 2002. Because two years' worth of obligations has now accrued, Robert shall pay each child or his or her educational institution $600 within six months of the issuance of procedendo. Payment is conditioned upon the children's qualification for the subsidy. See, e.g., Iowa Code § 598.21(5A)( d ) (subsidy terminates if the child fails to maintain a cumulative grade point average in the median range or above during [his or her] first calendar year in school).