It is hard for me to compete with her parents because with me she has to be an adult with them she can go back to college! Debt free!
I don't really see that as your "competition", generous parents aren't really a replacement for a husband. Maybe I don't understand the sitch, but it sounds to me like she's furthering herself through higher education and it will not affect you any since her parents are paying for it. You're still S'd right? So it's really none of your concern. Remember, you live your life and let her live hers!
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If my W decides to go to school out of state what should I do?
If your concern is that you'll lose access to your D's, then consult a lawyer ASAP. I'm not sure what your rights are in S versus D, some states (like mine) don't recognize S at all. You may have to file D to ensure she doesn't have a legal right to take the girls with her. But again, I'm not sure so talk to a L.