How Does Financial Aid Work When You’re Divorced?

Filing for financial aid can be more complicated when the parents are divorce.

A Divorced Dad From Massachusetts

I thought I’d bring this up because of an email that I received from a divorced dad from Massachusetts, who has not remarried. He makes about $100,000 a year and doesn’t own a home.

His ex-wife did remarry and she and her husband each make six-figure incomes. The ex-wife also owns substantial real estate holdings.

Bruce, the divorced dad, is naturally wondering how colleges will treat the income of the two separate families.

Divorce can be cut-and-dry when the college only uses the Free Application for Federal Student Aid (FAFSA). The FAFSA only requires that the custodial parent file the application.

Curious Definition of Custodial Parents

The definition of custodial parent is peculiar to the higher-ed world. The custodial parent is the one who has taken care of the child for the majority of the 12 months counting back from the day that the parent completes the FAFSA. So if you fill out the FAFSA on Feb. 1, 2012, you would look at who took care of the teenager from Feb. 1, 2011 to Feb. 1, 2012.

In this case, if the teenager lived with Bruce for 6 ½ months and with his mom and step-dad for 4 ½ months, Bruce would complete the FAFSA and the mom and step dad’s income would not be reported.  FAFSA has no interest in the noncustodial parents. As someone who has been married for 27 years this doesn’t strike me as fair, but those are the rules.

If the mom was the custodial parent, her income, as well as that of her husband, would have to be declared on the FAFSA.

Divorce and the CSS/Financial Aid PROFILE

In contrast with the FAFSA, it won’t be easy for families to know how they stand ahead of time if they are applying to schools that use the CSS/Financial Aid PROFILE. Schools that use this document can treat divorce much differently.

Last month at a college conference in New Orleans, I interviewed Paula Bishop, a CPS and an expert on financial aid issues,about how schools treat divorce, including those tricky PROFILE schools. If this is a subject that impacts your family, please check it out.

Read More from The College Solution:

Financial Aid and Divorce

5 Ways to Increase Your Financial Aid Award

Lynn O’Shaughnessy is the author of The College Solution and she also writes college blogs for CBSMoneyWatch and US News & World Report.

Learn more about The Ultimate College Workshop on Oct. 15.

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