She has custody of the kids, but he is no longer living at the house. He is in the dorm.
Unless he spends over 50% of the nights he is not at school in your home she gets the claim for the dependent exemption. These are tricky issues since you could still be entitled to a deduction or credit for the money you paid for his college despite not claiming him as a dependent. My advice would be for you to go see a CPA with your ex-wife and ask him to figure out the solution that results in the lowest combined tax and compare it with the staus quo solution. If the savings are significant, and they could be significant if your filing status could change from single to head of household, then you negotiate how to split the savings, and everyone benefits.