Divorce and Financial Aid

What happens when parents are getting a divorce and financial aid for their dependent child has yet to be processed for the next school term? Even if parents are just separating, it often requires a student to itemize the income of the student and of the custodial parent on the joint income tax return. If you’re in this situation, it’s important to find out how divorce and separation can affect your student.

Filling out the FAFSA after Divorce
Divorce and financial aid are closely tied together for students who are not filing as independent on the free application for federal student aid (FAFSA). When a student’s parents are divorced or separated, the custodial parent completes the FAFSA. When there is a stepparent (if the custodial parent remarries), his or her income must be included. There are a number of schools that also require the noncustodial parent’s income. Check with your school to determine the requirements for divorce and financial aid. The school will likely require a copy of the divorce decree or separation papers because the language may specify how the income and assets will be split.

What if the Parents Aren’t Helping Pay for School?
After a divorce, some parents may be reluctant or flat out refuse to file financial aid forms or help with college costs. They may feel their responsibility ends with the divorce. Or, they can no longer afford it. A parent who helps with college costs, even when it is a struggle, should be commended. The government and colleges feel it is the parent’s responsibility and count the income and assets of parents regardless of whether or not a parent is planning to assist with school funding. Even if parents refuse to pay, the school and government will consider their resources when determining a student’s eligibility and the student will have to make up the difference. Unfortunately, studies show that only “29 percent of children with divorced parents get parental support for college expenses, compared with 88 percent of children from intact families.”

What if the Student is Getting Divorced?
A student’s marital status at the time he or she completes the FAFSA will determine whether or not a spouse’s (or parents’) income will be considered. Since a separation doesn’t actually dissolve a marriage, a separated student is still considered married when being considered for dependency status. Answer “Yes” where it asks “As of today, are you married?” if this is the case.

For answers to these and other difficult questions, contact Westface College Planning. We understand this can be a confusing process if you aren’t aware of what is required when dealing with divorce and financial aid.

Photo Credit: quinet