In many of my divorce cases, how college expenses will be handled is an issue that needs to be addressed. It's common for parents to wait to divorce until their children are teenagers or young adults. This tends to be around the same time that people are preparing to send their children to college. Unfortunately, many are unprepared for the future higher education expenses.
Applying for and paying for college can be very stressful for many parents. Co-parenting is hard enough without the stress of supporting your kids through the college application process. Often, divorce settlements don't detail how college expenses will be handled. It's outside of the jurisdiction of many states' domestic relations courts. If college expenses are detailed in the agreement, they're often vague with limited concern around the details adding additional stress.
Enter the FAFSA. FAFSA stands for Free Application for Federal Student Aid. The FAFSA is used to determine federal financial aids such as grants, work-study, and student loans. About two-thirds of students attending college are eligible for some form of support.
The key to maximizing the financial aid your child will get is understanding and completing the FAFSA correctly. Providing too much information is the most common mistake that divorced parents make. If you report the income for too many adults, you could seriously hurt your chances of getting financial aid for your child.
Work together with your ex to maximize the financial aid opportunities for your child. I know that co-parenting is hard. I co-parent my kids with my ex, and I do understand that there are lots of ups and downs over the years. Here's the thing. If you can really set your differences aside and put your kids' education first, there are opportunities to work together to maximize the financial aid available to your child.
If you are not able to do this on your own, consider working with a mediator to work through how you will maximize your child's opportunities for financial aid.
The custodial parent for the FAFSA does not have to do with who has legal custody. For the FAFSA, the custodial parent refers to the parent who has the child more than 50% of the time. If a child lives with each parent an equal amount of time, then the parent who provided more financial support over the last 12 months should be identified as the custodial parent. If the custodial parent remarries, the income of the stepparent is also reported on the FAFSA. Below is an infographic that the US Department of Education provides to help you to determine who should be listed as the parent on the FAFSA form.
Consider college financial aid when making your parenting schedule, particularly if there is a substantial difference in income between the two parents. If the child is with the lower-income parent, more than 50% of the time, then the child will report the lower-income parent as the custodial parent. This is a common occurrence since the higher income parent tends to work more than the lower-income spouse. This could decrease the expected family contribution and increase how much aid they'll get. It's worth considering as you prepare your parenting schedule.
Get out your divorce decree. The FAFSA will ask for the date of your divorce, so you'll need to find that. You'll also need basic info such as the child's social security number, parents' social security numbers, etc. Having tax returns, bank statements, and investment account statement handy will make completing the application easier.
Don't wait, either. While the deadline for filing isn't until June 30, you can complete the process as early as October 1. Keep in mind that the earlier you file, the more likely it will be that your child will receive grants and scholarships, as those tend to be allocated early on.
If you are recently divorced, take the time to contact the school directly. If your change in marital status happened after your FAFSA was filed, there might be additional aid available to you. You never know unless you ask.
If parents are already divorced, only one parent fills out the FAFSA. In the FAFSA tips above, we share how to determine which parent it should be.
Since the parents are divorced, you only include the income for the parent who is considered the custodial parent for the purpose of the FAFSA.
The short answer is no. Students of divorced parents do not get more aid because their parents are divorced. However, if the lower-income parent is not remarried and is considered the custodial parent on the FAFSA then the child may be eligible for more aid than if the parents were still married and filing the FAFSA together.
If the parent who the student resides with for more than 50% of the year is remarried then their spouse's income information should be included on the FAFSA.
For more information about the FAFSA or to get started with your application, visit https://studentaid.ed.gov/sa/fafsa.
If you are struggling to navigate co-parenting your children when it comes to your finances, it might be time to reach out to a mediator. Contact Great Lakes Divorce Financial Services for a consultation today.
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