Financial Aid and Divorced Families

The college application process can be daunting. There are applications, letters, portfolios, interviews and the infamous and dreaded Financial Aid forms. Students and parents of divorced families face an even tougher challenge as they navigate the additional legal implications that arise when completing these forms. The online article, entitled “Divorce and Financial Aid” on www.finaid.com, succinctly and thoroughly covers this issue. The article addresses common questions surrounding divorce in the context of financial aid and summarizes parental obligations in completing the FAFSA (Free Application for Federal Student Aid) form.

The FAFSA Application

In all cases, your custodial parent is responsible for filling out the FAFSA. The key is determining who your custodial parent is, as it is not necessarily the parent who has legal custody. It’s important to consider who claimed you on their tax return and who provided you with the most financial support in the previous 12-month period. While the custodial parent is the one who fills out the form, it’s important to note that child support, alimony and additional support from another parent are to be included on the form. Stepparents living with a custodial parent and remarried parents are also required to report on the FAFSA.

It’s important to note here that unmarried, biological parents can be treated as a divorced parent scenario.

The article includes the following list, which defines criteria used to make custodial and other determinations for the FAFSA when dealing with divorced families.

1. The parent with whom the child lived the most during the past 12 months (the 12 months ending on the FAFSA application date).
2. The parent who provided more financial support to the child during the past 12 months.
3. The parent who provided the most financial support to the child during the most recent calendar year for which either parent provided more support to the child.
4. The parent who provided more than half the child's support (and will continue to do so).
5. The parent who has legal custody.
6. The parent who claimed the child as a dependent on their tax return.
7. The parent with the greater income.

Criteria 1, 2 and 3 are used for determining the custodial parent, with the first criteria being primary. In a situation where the parents split all costs equally (without even a penny difference), criterion number 7 is often used. In determining household size (the number of family members), criteria 4 is the most important. However, the student's custodial parent gets to list him or her even if the custodial parent does not provide more than half of the student's support.

The next logical question then is, who all are obligated to help pay for college. While some private colleges consider the non-custodial parent’s contributions when determining financial need, the Federal Government does not. Legal obligations for support of education needs can very state by state as well. States can also determine what kinds of expenses fall under the definition of educational support.

Crystal Anderson is the president of Crystal Clear College Planning, which helps Seattle-area families plan financially and academically for college. Learn more about our free local workshops on planning for college.