CSS Profile and Divorced Parents with Unequal Assets

Paying for College
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My last child will start college in 2022. His dad and I have been divorced almost 2 years. He got the house in the divorce and it has around 80k in equity. I have very little in assets and very little in AGI income. Around 29000 for last year. I’m going to school to get a better job. His dad doesn’t really have a great income as he is self employed. His assets are much higher than mine with him having the house. Our divorce decree says that we have to split college 50/50 after all financial aid has been awarded. My other child went to a school with just a fafsa but this son is interested in primarily schools that use CSS. Will my ex having all that equity in the house affect the amount of aid drastically? If so, any advice for me without the assets? He can’t get an equity loan because his income won’t support the mortgage and equity loan.

Also, does the CSS profile require the divorces parents to work together on the financial side? Does it let each parent see the financial info of the other? It was not an amicable divorce at all unfortunately as hard as I tried. I’m worried he won’t give up his info if it means I will be able to see it.

What does our child do if my ex won’t give up the information to complete the CSS? Due to my living outside the school district ex is custodial parent but very clueless when it comes to these things.

Thanks for help.

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For Profile schools, the custodial parent will complete the Profile. The non-custodial parent will complete the non-custodial parent form. You will do your form, and he will do his. These are set up so that divorced parents can’t see what the other parent is putting on the forms (unless the parents choose to share…that’s their choice).

Profile schools have different ways of dealing with home equity, but it is an asset. The amount the school uses will vary wildly from college to college. Some schools use zero, and some a higher %age.

You say your second student is interested in Profile schools. That’s fine IF you parents can afford the college costs. Have you agreed on an amount you can reasonably contribute, or is this a bottomless pit of money?

As parents, if you can’t afford the net cost at a $70,000 a year school, your kid needs to hear that.

With a $30,000 a year income…YOU aren’t going to be able to contribute much. Right?

And you say the dad doesn’t have much income so he won’t be able to contribute much, right?

My suggestion…you need to set a budget with this kid. Let him apply to colleges with the understanding that the net cost needs to be affordable for you parents. Do not go into debt, neither if you has income to support added debt for his college.

For the FAFSA, the custodial parent income and assets are used. The FAFSA does not ask anything about primary home equity. lWith a low income, it’s possible your kid will qualify for a portion of the Pell Grant, perhaps all $6000 plus of that. And a $5500 Direct Loan for freshman year. A lot depends on the dad’s income.

Is this student applying to colleges that guarantee to meet full need for all? Does he have competitive GPA and SAT or ACT scores to possibly gain admission? If so, is he applying to any colleges with guaranteed merit aid based on his stats?

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  1. Not all CSS Profile colleges require the CSS Non-custodial Profile. https://profile.collegeboard.org/profile/ppi/participatingInstitutions.aspx lists which do, but verify on the college web site, since some of the information is incorrect or out of date.
  2. With respect to working together on finances, both must cooperate with whoever runs the college net price calculators if you want any chance of them being accurate for giving financial aid estimates before applying. In many cases, the divorced parents are not willing to disclose their finances to each other, so the net price calculators will be a garbage-in-garbage-out situation.
  3. The actual CSS Profile gives the divorced parents each a separate login so that they can enter their financials privately from the other.
  4. However, once a college gives an actual financial aid offer, someone who knows the offer and one parent's financials can reverse-engineer the other parent's financials using the college's net price calculator.
  5. If either parent will not give financial information at all, then the student will not get financial aid from colleges that require both parents' finances. if the *custodial* parent refuses, then that will be a problem at all colleges that use the usual types of financial aid methodology that depends on the custodial parent finances (whether or not the college also requires the non-custodial parent finances).
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Please please do not rely on accurate net price calculator info.

One parent is self employed which is can render the NPCs inaccurate.

PLUS the parents are divorced.

In my opinion, the net price calculators will not give you a very good estimate of your net costs.

Net price calculators are really set up for more straight forward finances than this family has.

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For the FAFSA it doesn’t matter which parent has legal or tax custody, it matters who the student lives with the most in the 365 days before filing. If your student lives with you all holidays and weekends and all summer, you may be the parent whose income counts on FAFSA. It may work better for your child if that is you if your income and assets are lower.

Your child may want to go to a CSS school, but that may not be possible. Your divorce decree says you have to cooperate, but the schools don’t care and won’t enforce your decree. What you don’t want to happen is for your child and ex to agree to a $75k school and he agrees to pay $30k but there is no way you can afford to pay your half, or $30k too.

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For a Profile school…that requires the non-custodial parent info…it probably doesn’t matter which parent is the custodial parent.

The FAFSA does not ask for a speck of information about the equity in the primary residence. So this won’t matter at all for FAFSA purposes. The OP says the custodial parent has little income. So…the outcome of the FAFSA sounds like it might be similar with either parent.

And the kid doesn’t want to change schools most likely. Mom doesn’t live in the same school district as dad.

BUT for Profile Schools…everything is on the table financially. Both parents (unless it’s a school that doesn’t require non-custodial parent info).

What colleges? Because some don’t use home equity at all in their institutional need based calculations. Some use a small amount.

And if the school doesn’t guarantee to meet full need for all, this home equity issue might be a teeny issue as your full need probably won’t be met anyway.

I should add…$80,000 in home equity is not all that huge amount.

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While many profile schools do not require the non-custodial profile, they often have their own form for institutional aid

Schools do not care about what your court order states. They will tell you your EFC and any financial aid gap. The school does not care who pays; if no payment is received, your child is not attending.

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Thank you everyone. Our child has a 3.8 gpa, ACT scores of 32 and retaking soon. The gpa should go up with since child is a current junior and has hardest (for child) classes complete. Has primarily science classes left and flourishes in those.

Child and I are primarily looking at schools with guaranteed merit aid or schools that meet 100% of financial need. I live right on border of school system and 10 min from high school. Child spends time 50/50 for the most part between dad and I so if needed could spend more time with me for financial aid purposes if needed.

So every school treats home equity differently for CSS if I am understanding correctly. And would be the same for self employed income for dad.

Does our child have any recourse if dad refuses to give up income / asset information for financial aid? Do I have any recourse?

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Consider schools that don’t require CSS Profile (only FAFSA) or ones that only look at the CSS of custodial parents. The two I know of that only look at custodial parent are UChicago and Vandy. There may be others. I know someone posted a link to CollegeBoard that allows you to filter and find those schools. I will look and post for you.

ETA: This is actually in @ucbalumnus post above… I just couldn’t read it with all the extra characters in the converted text. Go to the site below and use the filters to find schools that don’t require the non-custodial profile.

https://profile.collegeboard.org/profile/ppi/participatingInstitutions.aspx

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@maryrich

The colleges will determine your student’s financial need. They will subtract any need based aid you receive from the college from your bill.

You will be responsible for paying the balance. The colleges honestly don’t care whether the two parents agree on how this is going to be paid…or not. The bill needs to be paid.

So…if the one parent doesn’t plan to pay, the parent who IS planning to pay needs to make sure affordable schools are on the application list.

Is there “recourse” if the other parent doesn’t pay in divorce cases? Well…you can go back to court and try to get the money. But recourse from the colleges is unlikely.

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How do,you hide assets or 529 plans?

Also, remember…these colleges are looking at FAMILY income, not just parent income. The other parents spouse is contributing to that family living expenses, right?

The net price calculators are typically not accurate for divorced families. But if you had included both the former spouse and his current spouse income, your estimated net costs would likely have been closer.

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Unfortunately, there is no way to distribute “free money” in a way that’s going to be absolutely fair to every single family and every single situation. For the most part, a divorced and remarried parent has a better lifestyle (even if the assets don’t get co-mingled) than that same divorced parent who has not remarried. Even if it’s just having two incomes available to pay for a nicer apartment, heat, electricity- that’s a higher standard of living than it would be with just the income of the divorced person living alone with no shared expenses at all. Colleges aren’t expecting the new spouse to dig into his or her pocket to pay for college- but the financial aid formulas reflect the presence of another wage-earning adult who contributes to living expenses and therefore- means that there is money from the bio-parent to pay for college.

Agree that there are people who find ways to cheat which is terrible but that goes for everything in life. W2 wage earners don’t have the illegal options that someone who owns a restaurant or another cash type business can have (not that there aren’t tens of thousands of honest restaurant owners who pay taxes on every single cent), and someone with a home office has many more potential “deductions” than someone who works in a factory or a school.

At the end of the day though- nobody takes on educational debt without that being a conscious choice-- and so the answer to not becoming mired in debt is simple- don’t borrow. You cannot borrow for college “accidentally”- so just don’t do it, and figure out another way. I’ve had people who work for me who take once class per semester (my company has generous tuition benefits) and believe me- we throw a big party when they finish. It’s not easy juggling a full time job and college, and I know many of them have wondered if it’s worth it. But to graduate with a Bachelors’s degree, no debt-- not for everyone, but something worth pursuing.

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If by “hiding assets” you mean not reporting assets on financial aid forms that should be reported, yeah, that is easy. It’s also pretty easy to catch, with only some curiosity and a little bit of digging needed. There is no other “easy” way to hide a 529 account that is legally owned by the student or a reporting parent. Declining to say how this can be done because you don’t want to “give people here any ideas” is a cop out and causes me to seriously question your claim.

And what kind of debt should be taken into consideration?

When a divorced parent (or any parent, really) has the means to support a child’s higher education expenses but refuses to do so, should the schools step in and make up for some or all of the money that the parent(s) could reasonably contribute? A system that works like this would suddenly have parents all over the country refusing to pay for a child’s college education, because, you know, the school will do it for me. Also, where is the school going to get the extra money needed?

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You can “seriously question my claim” or not, I don’t really care. I know people who do this all the time and I know if I wanted to hide any 529 money my kids had, it doesn’t take a genius to do so either. And yes, people who are financially savy do it ALL the time. For some dishonest folks, that’s their goal. To get all the free money from universities that they can. There are ways to “hide” assets legally, and then there are also the people who just don’t report assets and hope they don’t get caught which is a felony. Those people just hope they don’t get audited but when they do just say they forgot or made a mistake.

As for debt, credit card debt is not considered. A AFR loan might not be considered, a promissory note may not be considered. The nature of these loans due to the types that they are do not count. Most kinds of consumer debt are not included. So basically if someone owns 100k in stock but has 100k in credit card loans they are not offset as having a net of $0. It doesn’t make sense for the person to liquidate and have potential capital gains to pay off the credit card debt either and potentially leave them with no savings for a rainy day, or as we have now seen, a Covid emergency. All these people now in arrears with their rent, welp too bad for them that they owe that money. If someone has civil penalties due to a lawsuit or an IRS penalty or criminal restitution, same deal. It does not offset against any asset for Fafsa. So while they can owe millions, if they have any other assets, the assets are what count and the rest is ignored.

Two parents who are divorced, should never be lopped together and have their assets and income comingled in order to pay for a college education. It’s one thing if a CSS/Fafsa calculation wants to make a separate determination for each parent based on their respective assets/income/liabilities, etc. and then if one parent doesn’t want to pay his/her share that’s fine, but for my kid to be told he/she can’t get any aid or grants because someone they aren’t even related to makes 10x more income than either parent is a real problem. So, I wouldn’t exactly say that the parent in that scenario has the means to support a child’s higher education when it isn’t even their kid. Additionally, let’s not even forget that from day 1 these schools hit us and the students up for donations. And yes, there are parents all over the country refusing to pay for a child’s education. There are also tons of students taking on debt that they have no business taking on. That is not what the point is here. And where do schools get the extra money? You’re joking right? There are government grants and then we can’t forget as I just mentioned, the money they consistently hit us up for with their nonstop campaigning. And btw, there are parents all over the country who do refuse to pay for their kids college education. Ultimately these kids may just find it easier to become independent from their parents in order to qualify for aid.

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Ok, I’m ready to be educated. Please tell me ways in which assets (like a 529 account) owned by a student or reporting parent that would normally be reported on financial aid forms can be legally hidden such that reporting is not required. Since what you will be revealing is by definition legal, there shouldn’t be any worry about giving “people here any ideas,” and you will in fact be doing a service for CC readers.

Are you really suggesting that consumer credit card debt should be allowed to be reported on financial aid forms as a way to offset reportable assets? And someone with a civil or criminal judgment against them should be able to use the judgment to offset reportable assets?

The reason that a step-parent’s income and assets are asked for on Profile was already explained to you, but to repeat: the step-parent is in no way expected to help pay for the step-child’s college, but that income and those assets are expected to help cover household expenses, which means that the spouse (student’s bio parent) will be better able to help with the student’s college expenses.

This is a red herring. How hard is it to say no? There is no legal, ethical or moral obligation to make a donation.

Where do you think the money for government grants comes from? Are you first in line to pay more in taxes so that colleges can get more in government grants to make up for the parents who have the means to support a child’s college education but have refused to do so?

How easy do you think it is for a student to become independent for financial aid purposes? Are you familiar with the FAFSA rules on a student claiming independent status? Which of those 13 rules do you consider the easiest to satisfy?

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@srparent15

Your student has options.

  1. It sounds like he is a strong student so hunting merit money is an excellent strategy. This doesn’t require filing financial aid forms at all in most cases, and incomes aren’t a consideration for either parent.

  2. There are a large number of very fine schools that use the Profile but do not require the non-custodial parent form. Start looking for those. Look carefully at their financial aid websites. Some do have a school form that asks for non-custodial parent information. Others don’t ask for it at all. Some reserve the right to ask for additional information. Your student probably can find at least a handful of colleges that don’t require the non-custodial parent Profile.

  3. Apply to colleges requiring the FAFSA only. Most do not guarantee to meet full need for all, but University of Chicago does meet full need and is a FAFSA only school. There is a short Chicago form, but they do not ask for non-custodial parent information.

  4. I’m not sure how far our of college your student is, but have you discussed college financing with the other parent? Or has the student? As difficult as this might be, it might be beneficial to get a dollar amount that this parent will contribute.

  5. You could take your former spouse back to court and see if you can get money for college from him. This is expensive and not always successful, but it’s an option.

  6. Your student needs to cast a broad net. He also needs to understand family financial constraints. While he might want to attend a very costly college, that might be out of your budget. The kid needs to know this and understand it.

No one needs to attend a $70,000 plus a year college. Look at your instate public universities. Look at their honors college programs. See what they have to offer.

The way need based aid is calculated might not be your cup of tea, but it is what it is. Accept it and work within that.

If your kid isn’t a Senior right now…I would suggest he look at University of New Mexico, University of Alabama, and Arizona. All have auto scholarships based on stats and can be very very affordable for out of state students. They also have some excellent programs.

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MODERATOR’S NOTE

Let’s focus on the original poster and not get sidetracked into a strawman debate.

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Thank you all for suggestions. We will work on a list. I just want to be prepared for all possibilities. Hopefully I will be surprised and ex will provide all needed information. He is the king of delaying and deflecting. My son knows I can’t afford a huge amount out of pocket and why we are trying to do so much research.

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Your best bet may be to chase Merit money. My high stats son got full tuition at several colleges when he applied. That would leave you with room and board. This site has a lot of information regarding merit money. And you can search yourself. I started by looking at schools with the major my son was interested in, then by the merit scholarships they offered. Many have early deadlines, so keep those dates in mind. Like November and December deadlines. Doesn’t have anything to do with applying ED, so you do not have to commit early, but you get decisions early. Good luck.

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