College aid applications impacted by divorce

One of many family law issues that couples who have children often confront following a divorce is that of applying for college financial aid. Making sure that this works out in the best way possible may even need to be factored into making intelligent, informed decisions about which parent college age children live with.

Why is this issue important? It is the fact that the federal college financial aid form, known as FAFSA, is filled out by the primary custodial parent, with only that parent’s income alone factoring into qualifying for a number of aid programs that are income-based. Accordingly, a child may qualify for more financial aid in some instances if they currently reside with the parent with the lowest income. The relevant time period for that inquiry is not the calendar year; it is the 12-month period looking back and ending on the date that the FAFSA form is filed. If the child stays a completely equal amount of time with each parent – a relative rarity – the form is to be filled out by the parent who pays the most to the child’s support. This may be different in some instances than the parent who claims the child as a tax exemption.

It is also important to realize that in instances of remarriage by the custodial parent, the income and assets of the new spouse factor into the FAFSA form and can reduce eligibility for income based aid if they are higher. There are some special rules that are somewhat different for the minority of about 250 private schools that don’t require the FAFSA form. Most of them use a form known as the CSS/Financial Aid Profile, and that makes provision for reporting the finances of both parents, despite the divorce, with some schools saying that they don’t mandate the gathering of such information from a noncustodial parent.

Source: CBS News, “How does divorce affect college financial aid?” Lynn O’Shaughnessy, Sep. 27, 2013

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