FAFSA Guide for Students with Divorced Parents

Filing of the FAFSA can be confusing for unconventional families. Dive into our FAFSA guide for students with divorced parents.

Updated by Tanya Dutta on 23rd September 2020

With the conception of FAFSA, education has experienced revolutionization. One such benevolent perk of this initiative is FAFSA for students with divorced parents, or with unconventional family anatomy.

For students with divorced parents, the custodial parent is required to file for the FAFSA. Similarly, FAFSA has laid down norms for other unconventional family structures. 

Education is a fundamental right for everyone. The U.S Department of Education has celebrated 120 years of outstanding service. It has catered to the interests of every student in the country, irrespective of caste, creed, and economic status. Financial aid plays a critical role in the academic life of a student. Due to an array of circumstances, many students are unable to meet the expenditure of higher education. They resort to various sources of financial assistance. The dynamic nature of FAFSA has alleviated this challenge of the financial crisis, and enhanced every aspect of the educational process in the country.

FAFSA for students with divorced parents

The responsibility of filing the FAFSA falls in the hands of the parents. This is primarily because different aspects of the ‘family finance’ come into the picture while filing for the FAFSA. Along with the financial documents, the parent is also liable to present several legal and official documents as per the FAFSA requirement. This may include social security numbers, employment details, and many more. 

In the case of FAFSA for students with divorced parents, the custodial parent needs to file the FAFSA. Custody and custodial parent are two separate entities, in the land of FAFSA. ‘Custodial parent’ is defined on the basis of four integral criteria, namely, 

  • The parent with the lion’s share of the child support finances during the last 12 months qualifies as the custodial parent.

  • The living situation of the child during the last 12 months (until the filing date of the FAFSA). The parent who spent the maximum time with the child, living under the same roof becomes the custodial parent. 

  • The parent with the larger income is liable to file the FAFSA in case both the parents have equally contributed to child support, and the child has lived equal duration with both the parents. 

  • The parent with the maximum contribution to child support in the latest year is responsible for filing the FAFSA in case both the parents have equally contributed to child support in the last 12 months. This also certifies the number of dependents of the child. 

The aforementioned criteria are as per the Higher Education Act,1965 - section 475(f)(1).

Parents who contribute more than half to child support may be listed in the FAFSA by the custodial parent. This is instrumental in determining the size of the household but might outturn in an anomaly especially when the non-custodial parent gets married again. In such a situation, the non-custodial parent has the right to name the child as a part of the non-custodial family as well. This results in two households for the student. 

The financial structure of the non-custodial parents does not substantiate the student's financial aid requirement. However, there are private schools that do regard the non-custodial parent's assets as a contribution to child support for which they need to file an additional financial aid form. This practice is strictly confined to college scholarships. 

Parents who have declared the dependency of the child in the tax return may be exempted from filing the FAFSA as they do not fall in the deciding factors. Similarly, parents with higher incomes do not stage as a direct determinant for filing the FAFSA. However, their income might substantiate for the determination of the custodial parent.  

For divorce-seeking parents

The wisest decision for parents who are undergoing a divorce or considering a divorce is to include college funding (of the child) in the divorce contract. This provision (for college funding) may include financial support for a minimum of 10 years or for an entire academic career (until graduation), and payment of the entire or 50% of the CoA (accommodation, college supplies, tuition). The CoA should be directly paid to the school, unless, the child decides for off-campus accommodation. In such a situation only the tuition fee, and the cost of the board to be paid directly to the educational institution. 

For remarried/stepparents

In cases where the custodial parent gets married again, the stepparent's financial status is taken into consideration to decide the degree of the student's financial need. In the case of the latter's death, the monetary value of his/her estate is taken into account. Prenuptial agreements have no effect on Federal aid. However, Federal aid does not consider the financial status of the spouse of the non-custodial parent.  

FAFSA for students with unconventional families

A student might be the victim of parental separation or divorce. Other forms of unconventional family makeup may include, step-parents, unmarried biological parents, and parents who are seeking/undergoing a divorce. Nevertheless, none of the aforementioned circumstances should hinder the child’s chances for financial assistance through FAFSA.

The US Department of Education has priorly researched on the various circumstances that might lead to a student’s inability to file for financial aid. Considering the family composition has one of the determining factors, it has introduced FAFSA for unconventional families.

Filling and filing of FAFSA for students with unconventional families have the following norms -

  • For separated parents, the filing is under the name of the custodial parent

  • For separated parents with the same residence, the FAFSA should be filed together

  • For divorced parents, the filing is under the name of the custodial parent

  • For step-parents, both the custodial parent and the stepparent are responsible for filing the FAFSA

  • For parents undergoing a divorce, both parents are responsible for filing the FAFSA

  • For unmarried biological parents, the filing is under the name of the custodial parent.

Why should you pay heed to FAFSA?

Filling forms, and applications can be quite a tedious job. Most people tend to refrain from it and look for alternatives (FACT!). Surely, time is money but FAFSA is the ladder to reduce or waiver the requirement to invest a monumental sum of your finances. You no longer have to break the bank.

FAFSA is instrumental in receiving or being eligible for Federal Aids and numerous other loans/scholarship opportunities. It can very well be deemed as the academic ‘life-supporting system’.

Income Tax benefits and FAFSA

The benefits received from the income tax returns of the parents is independent of the FAFSA. Only parents who have claimed the dependency of the child in the income tax returns are liable to avail benefits from the tax returns due to educational investment. 

Top 7 FAFSA hacks for students with divorced parents

Married, unmarried, or separated, the parenthood of a child should never pose a hindrance to his/her education. This is a concept to be particularly memorized by the parents. The possibility of increased financial assistance is always in the corner and is never impossible. But, how you make the maximum out of the current situation is on you, and your parents. A top-priority trick would be to read thoroughly on the FAFSA guide for unconventional families. This will help a long way in receiving insights on the subject, elevating the user experience.

Here, our top 7 FAFSA hacks for students with divorced parents.

Talk it out

The circumstances might be grave, and communication (between your parents) might be strained. But, you need to tell them exactly how their collaboration can help you earn a generous package of financial assistance.

Read and research 

Crack the internet, and research every nook and cranny for information on FAFSA. This would help you, and your parents get the bigger picture of how things work. FAFSA is an integral component of higher education. An in-depth understanding of the norms, regulations, and guidelines can make you hit the financial aid jackpot. 

Early engagement

A college education can be expensive. With the kind of investment involved, it requires advance planning. A divorce especially amplifies the need for advance preparation. For the purpose of financial aid (through FAFSA), the parents need to discuss elaborately on the living situation of the child, child support, tax benefits, and more. 

First-come-first serve

Due to fund deficit, many students get denied for financial assistance. The assistance is mostly based on a first-come-first-served basis. It is integral to file for FAFSA as soon as the application process starts. Waiting for the deadline might largely hamper your chances to earn a handsome sum of financial aid. 

Stay prepared

Gather all information required to fill the FAFSA form. This can include, the social security number, driver license, value of custodial parent's assets, legal documents, social security number of parents, information on federal tax, and more. 

You may also read - FAFSA requirements

Leverage the situation

Learn how to make the maximum out of the current situation. You might belong to an unconventional family structure, but this might just help you crack a ginormous amount of financial aid. Custodial parent and custody do not coincide, and FAFSA considers custodial parents for filing of the form. According to the norms, the custodial parent's income acts as the deciding factor for financial assistance. Hence, the lower the income of the custodial parent, the lower is the EFC, and the higher are the chances of receiving generous financial aid.

Seek help

FAFSA can be complex, especially for students with unconventional families. A thorough chat with the school counselor/ advisor can help clear concerns regarding the subject. They can also act as a mediator for parents who do not see eye to eye. Get all the help that you can get, because 'the clearer the picture, the better is the view'.

Conclusion 

Education is a top-most priority. A child’s family makeup should never be detrimental to his/her education. Filing of the FAFSA is essential for the successful completion of the child’s education. It is highly recommended to thoroughly research the various aspects of FAFSA for students with unconventional parenthood. The parents need to hold an amicable discussion on the filing process keeping in mind the interests of their child. FinAid has an exhaustive guide on FAFSA for students with divorced parents. 

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