Financial aid applications can be somewhat confusing because there are several different criteria applied for different kinds of parenthood:. As noted above, 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.
For determining household size the number of family members , criteria 4 is the most important. This leads to the anomalous situation where a student can be counted as belonging to two different households. For example, suppose the non-custodial parent remarries and has college-aged children of his own. Criteria 4 is also used to determine whether the student has one or more dependents, in the rules for specifying whether the student is an independent student with dependents.
Criteria 5 and 6 are not used in the financial aid formulas, but are sometimes used to give an indication of the right choice when the other criteria are insufficient. Criteria 6 is also sometimes used to substantiate claims made under criteria 4.
For example, a financial aid administrator may ask a parent for a copy of their tax return, to see whether they claimed the child as a dependent. However, it does consider child support received by the custodial parent. Many private colleges do consider the non-custodial parent as a potential source of support, and require a supplemental financial aid form from the non-custodial parent.
It is best for parents who are in the process of getting divorced to prepare a written college support agreement in addition to a child support agreement. Such an agreement should specify who is responsible for how much of the college expenses, how many semesters of support will be provided, any limits on annual payments, indexing payments to the tuition at a particular college e. Although it is common for college support agreements to specify that the child must attend a state college, it is better to index the support requirement against the state college tuition while allowing the child the flexibility to choose another college.
It is also common to base the college support requirement on the expected family contribution figure. An informal separation is treated the same as a legal separation on the FAFSA, if the separated parents do not live together. Ties are broken based on whichever parent provides more financial support to the student. If that is not determinative, then ties are broken based on whichever parent has the greater adjusted gross income AGI.
The first three rules are based on the Higher Education Act of The last rule is based on guidance issued by the U. Department of Education. If the custodial parent has died, the stepparent is no longer responsible for filing the FAFSA unless they have legally adopted the student and the non-custodial parent is responsible for filing the FAFSA.
The former is defined by the Higher Education Act of and the latter is defined by the Internal Revenue Code of But, basing family size on federal income tax returns can be complicated, since the IRS allows mutual support agreements that allow parents who are divorced or in a legal separation to allocate which parent gets to claim the children as dependents, regardless of where the children live and who provides more financial support.
Sometimes different parents claim the children in odd and even years. When there are multiple children, sometimes each parent claims half of the children each year. If this is not definitive, it is likely that the U. Department of Education will issue guidance basing the determination of the custodial parent on whichever parent has the greater adjusted gross income AGI , similar to the current guidance.
Note that this definition of the custodial parent is different than the IRS definition of a dependent. Also, some schools may require a copy of the divorce agreement in deciding on financial aid, but you will not need that information when you submit the FAFSA. Remember that you don't need to include the financial information of every adult in your life.
If you do, you're over-reporting income and it could cause you to lose out on financial aid. Noncustodial parents may be required to provide information later to some private schools when aid is being awarded, but there's no need to overreach with FAFSA. There are a few ways to use divorced, separated, or unmarried parental marital status to your financial aid advantage. One is by ensuring that your custodial parent is the one who makes less money. By living with the parent who earns less, you EFC will be lower and your aid package could be higher.
Divorce settlement agreements can and should include the written details of a college support plan. In this case, parents decide the percentage of college costs each person is responsible for and what expenses will be covered by each parent.
When in doubt, ask them for help. Be sure to check our question-by-question FAFSA guide to help ensure that you qualify for the maximum amount of financial aid that you're entitled to. Carol Katarsky is a contributing writer for Nitro. She is an award-winning journalist with extensive experience writing about both finance and education. She lives in Philadelphia with her husband, son, and one cat more than she should.
Read more by Carol Katarsky. View Disclosure. See Examples. Disclaimer: The information obtained throughout the Nitro site is intended to be used for educational purposes only.
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