FAFSA 101 – Divorced Parents
As the year winds up, high school seniors and currently-enrolled college students and their parents are able to fill out their Free Application for Federal Student Aid, or FAFSA, (https://studentaid.ed.gov/sa/fafsa) to determine their eligibility for federal financial aid for college. The FAFSA for the following school year is available annually on October 1. When parents are divorced, there are several questions that come up as far as which parent’s income to report as well as whether or not to report child or college support from a non-custodial parent. At Larsen Law Firm, home of your Provo divorce attorney, we’re happy to help with some of the most commonly-asked questions for divorced families and federal student aid for college.
What time period does the FAFSA cover as far as reporting?
It’s important to remember that when you fill out the FAFSA that you are looking at the past 12 months. With which parent did the student live or receive the most financial support?
What if the custodial parent is remarried?
If the student lived with a custodial parent and stepparent, the stepparent’s income is required on the FAFSA. Many ask how to report the stepparent’s income if the custodial parent and stepparent were not yet married for the prior 12 months. Income from the stepparent is to be reported on the FAFSA for the full 12 months prior.
Is child or other support from the non-custodial parent reported on the FAFSA?
Yes. It is important to carefully complete the FAFSA, since child support payments are reported separately than alimony, as child support is untaxed income and alimony is taxed. One of the most common errors on the FAFSA is that custodial parents mistakenly report child support and alimony combined and then later in the form report alimony again. This results in an inaccurate expectation of the expected family contribution, or EFC.
What about income from the student’s work?
If the student is employed, this income is reported as well.
What’s the best way for a non-custodial parent to contribute to their child’s higher education so that the funds are properly used?
Since many divorces are acrimonious, this comes up often. One of the best ways for parents and extended family members to contribute to a college fund is to set up a 529 Plan. These plans allow parents to put money aside for their child’s education bit by bit and the funds are used for tuition and fees at an in-state college. Many families make regular contributions with year-end bonuses, found money, and with tax refunds.
If you need further help, high school counselors or the college’s financial aid office are both ready resources.
Please schedule a free consultation with a leading Provo divorce lawyer to examine your permanent orders to make sure that your children’s higher education costs are reflected fairly.
