Divorced Parent and FAFSA

Paying for College
1

<p>I am Divorced for 14 years and never remarried. Neither has my Ex husband. </p>

<p>My child now 17 and applying to colleges (already have various acceptances) has lived with his father in CT since she was 5 years old and has had the benefit of the good public school system there. Last June when her high school got out for summer in CT I moved her into my apartment in NY (she took some summer college art courses in NYC and continued to stay with me) so that during the past year she has lived mostly with me for FAFSA purposes. During her final school year I have driven her up to CT every morning (I work nearby) and she has attended the same high school she always has. We never informed the high school what we were doing as did not want to risk them telling us she could no longer attend school there and quite frankly it is none of their business.</p>

<p>That is the background now here are the questions/comments:</p>

<p>1) I will be claiming her on my 2007 tax return and will give my information on the FAFSA as a single parent. How much trouble am I going to have with the colleges due to our living in NY state and my child will graduate high school in CT state? My home is in another state but is only twenty minutes away from my daughter's high school. </p>

<p>2) I have no savings to speak of but do own my own coop in a regulated community which means the coop is not worth much. I am a mental health counselor and earn less then $35,000.00/annum. Is this too much money to make to qualify for aid. I live pay check to pay check.</p>

<p>3) I am a Bill Gates Scholar. That paid for me to get my GED and undergrad degrees and now I am attending school at night working on a Masters in Mental Health Counseling. I mention this because someone told me it is a good thing if me and my daughter are going to college at the same time. Is this correct?</p>

<p>4) Even though I think it is better to apply for financial aid under my information, In case they dont let me, I have some questions regarding applying under my ex husband's information instead (which he does not want to do) as follows:</p>

<p>a) He has his own small business (some sort of commodities broker I believe) and has not earned one penney in the past two to three years and his tax returns reflect that.
b) He has health insurance for my daughter and himself thru CT medicaid program because he has no income.
c) He lives at his parent's home in CT and pays no rent. That is where my daughter has been living as well for 14 years.
d) I think he owns an apartment in NYC but had to start renting it out a few years ago when his business got bad. He was using it as an office before that. I have no idea what it is worth or how much of a mortgage he has on it. It is not a very big apartment but it is in a nice location in NYC.
e) He tells me he has very little money but I think he must have money saved away just to be able to be in a business that makes no money and he does not seem to care too much. If we were forced to apply for aid under his info as a single parent is FAFSA and/or the colleges going to require he tell how much he has in the bank even though he has zero income and is on medicaid?</p>

<p>I am asking this because my ex husband started giving my daughter a hard time last year when she said she wanted to study Art in college. He said he was not going to pay for a JOKE degree. That is why I had her live with me for the past 7 months. Could the FAFSA or the colleges request his financial information even if I am going to apply as a single parent? What if they do and he tells them to get lost? </p>

<p>Does anyone have some input? Thanks.</p>

<p>SashaB55</p>

2

<p>If ex is getting medicaid, I don't think he can have significant assets, unless he has them stashed away secretly. If he's the custodial parent and has no assets and no income, why not let him file the FAFSA?</p>

3

<p>I spoke with my ex and he says he has following:</p>

<p>1) zero income for past three years
2) 529 set up years ago that he put money in over time and that he just changed the beneficiary to be his mother. It was our daughter. He says there is enough in that to pay most of the 4 years but he does not want to use that $. Wants to give it to her later.
3) $$ in Mutual funds and annuities for his retirement.
4) coop in nyc</p>

<p>He says he thinks that he would have to show the 529, the Mutual funds/Annuities and the coop even though he does have any income. He says neither Fafsa nor the colleges should ask for this info because he makes under $27,000.00 but he says that they will ask anyway and then they will give my daughter ZERO AID. He says it is best for me to declare my daughter as my dependent. Is this correct?</p>

4

<p>
[quote]
2) 529 set up years ago that he put money in over time and that he just changed the beneficiary to be his mother. It was our daughter. He says there is enough in that to pay most of the 4 years but he does not want to use that $. Wants to give it to her later.

[/quote]
So would we all. No ethics here.</p>

5

<p>I'd say since you supported her 7 out of 12 months in 2007 she is your dependent. Period. There is no need to consider what's "best," as if you can just arbitrarily assign dependency. That also avoids all your questions about ex, which frankly make me uncomfortable.</p>

<p>I doubt you'll have a problem with the inconsistency between the child's NY residence/dependency and the CT location of the high school. The FA offices are not the residency police, and there could be a lot of legitimate explanations for it, none of which are within their purview to evaluate, so why would they question it?</p>

6

<p>For FAFSA you only need info from custodial parent. For CSS/Profile, which many private colleges require, you need info from both parents. So if you are the custodial parent, and not applying to CSS/Profile schools, just your assets and income are required. Declaring her on your income tax form doesn't necessarily make you the custodial parent though (a noncustodial parent can take kid as dependent if the other agrees). Sounds much easier if you can be the custodial parent and she only applies to schools that take FAFSA. Are you near SUNY/Purchase? FIT? Good low cost art schools!</p>

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<p>Well...the high school clearly will have your child's place of residence as an address in Connecticut. I'm not sure how you can explain that one away since it's what you have been using as your child's address this year (that's another issue that I won't broach). If this were a private school OR you were paying tuition, your address would be listed as NY...but you are not doing that...so your child's address on everything the high school sends will be the CT address. I looked at my kids' stuff from when they applied to college and our home address was on the info the high school sent. Perhaps that is not the case with your child's high school...but I'm not sure how you can find that out without them knowing why you want to know.</p>

<p>It does sound like you've been the custodial parent this year. The only issue you have is one of residency and that probably is of more interest to the public high school your child attends than it is to the colleges (unless you were looking for instate tuition...which I think would be complicated by our residency/school address situation...but that's my opinion and not grounded in any fact). </p>

<p>If you're daughter is applying to schools using the FAFSA AND Profile, none of this will matter because those schools using the Profile require all parental information. If your daughter is applying to FAFSA only schools, it sounds like you would be the better choice as custodial parent.</p>

<p>One thing that someone more knowledgeable than me might be able to answer...can someone be the custodial parent IF the student's address is not the same as that of the custodial parent (which sounds like...on paper at least...is the case for this student. The custodial parent with whom the child DOES reside is in NY...but the address of record with the school is CT and is the father's address)?</p>

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<p>I've cut the above two sentences from the OPs response to a post. </p>

<p>I guess I have to wonder...if the parent has enough in the bank to subsidize four years of college...WHY does he think it's fine for someone else to subsidize this child's college education? I know there is nothing dishonest about this, but I just have to say...it makes me uncomfortable to know that someone HAS the money in the bank to support their child's college education and recognizes that schools will know that is the case...and yet that same person does NOT want to support that child's college education. It just doesn't seem right to me.</p>

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<p>You know if you are now the "custodial parent" living in NY and your child attends public school in CT, that the state of CT, specifically the department of education in the city that your child attends school in can make you repay them for the cost of your child's education.</p>

<p>You may also run into problems if you decide on attending one of the State universities in NY or CT.</p>

<p>
[quote]
At the State-operated campuses (University Centers, University Colleges, and Technology Colleges), students are generally considered New York State residents if they have established their domicile in NY State for at least twelve months prior to the last day of the registration period of a particular term. </p>

<p>Generally, individuals who have maintained their domicile in New York for a period of less than twelve months prior to the end of registration are presumed to be out-of-state residents and are not eligible for the resident tuition rate.
Individuals do not meet the twelve-month residency requirement if domiciled in New York State primarily to attend college.
Individuals who are financially dependent and whose custodial parent(s) lives in a state other than New York are generally not eligible for the resident tuition rate. However, students of divorced or legally separated parents may acquire a NY State domicile if the custodial parent is a NY State resident or if the student resides with a non-custodial parent who is a NY State resident and the student intends to continue to reside with that parent throughout their attendance at SUNY. </p>

<p>Determination of Domicile
To determine a student's domicile, campuses use the following principles: </p>

<p>A person may have multiple residences but only one domicile. </p>

<p>A person retains a domicile until it is abandoned. </p>

<p>Physical presence alone does not establish domicile or residency. </p>

<p>SUNY:</a> Residency</p>

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<p>for CT;</p>

<p>
[quote]
</p>

<p>Sec. 10a-28. (Formerly Sec. 10-329d). Definitions. For the purposes of this part:</p>

<p>(1) "Institution" means a constituent unit in the state system of higher education;</p>

<p>(2) "Residence" or "reside" denotes continuous and permanent physical presence within this state, provided temporary absence for short periods of time shall not affect the establishment of a residence;</p>

<p>(3) "Domicile" denotes a person's true, fixed and permanent home and place of habitation. It is the place where he intends to remain, and to which he expects to return when he leaves without intending to establish a new domicile elsewhere;</p>

<p>(4) "Emancipated person" means a person who has attained the age of eighteen years, and whose parents have entirely surrendered the right to the care, custody and earnings of such person and who no longer are under any legal obligation to support or maintain such person. If any of the aforesaid tests are not met, such person shall be deemed an "unemancipated person";</p>

<p>(5) "Parent" means a person's father; or if he has no father, his mother; or if one parent has custody of an unemancipated person, the parent having custody; or if there is a guardian or legal custodian of an unemancipated person, then such guardian or legal custodian, provided there are no circumstances indicating that such guardianship or custodianship was created primarily for the purpose of conferring the status of an in-state student on such unemancipated person;</p>

<p>(6) Attendance at a school or schools in this state shall be deemed "continuous" if the person claiming continuous attendance has been enrolled at a school or schools in this state as a full-time student, as such term is defined in section 10a-26.</p>

<p>Future</a> Students - University of Connecticut

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<p>OK...let me get this straight. He doesn't want to use this money for college. Instead he (and apparently the OP too) wants someone else to subsidize this child's college education so that HE can give her a big gift when she graduates. </p>

<p>I'm with Bandit...this has about as much ethics as sending a child to a public school in a town and state in which she does NOT reside without paying the tuition. </p>

<p>I'm sorry, I think this is gaming the system big time.</p>

<p>Also, re: the residency issue...if this child has health insurance via medicaid in CT (the Huskie plan is for CT residents...not residents of NY) and through the father, and uses the father's address as her school and living address, HOW can the mom be the custodial parent?</p>

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<p>in response to post above.... by fudging it?</p>

<p>that insurance is for under 19. so you are going to need to do something different for college (not sure of your D birthdate, but many colleges require you to prove you have health insurance or they force you to buy theirs)</p>

<p>The property you and your ex own could increase your EFC if you need to do a CSS profile. are your D's school's fafsa only?</p>

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<p>There are many things that may sound questionable and can be a basis for ethics debates when it comes to financial aid asset reconfiguration. However, the line is pretty firmly there when it comes to what is legal. If someone wants to transfer assets to get more financial aid and does it in a legal way, he is not doing anything "wrong". THere are many parents who save for college in a child's name and are advised by the colleges themselves to spend down that money so they are not assessed more in the financial aid process. Many financial aid books, articles, advisors tell parents that if grandparents are willing to pay, that they should hold off until after the aid numbers come in and then LEND the kids the money, and give them what's left in the college fund AFTER they graduate in order to maximize financial aid. There are all sorts of money transferring advice to get more aid, and so it should be. I see nothing wrong in changing the beneficiary of a 529. I don't think it would make much difference as it still is the asset of the parent, not the beneficiary. Also, I'm not sure what the heck Dad wants to do with the money AFTER daughter graduates as she is not going to have much flexibility in using those funds unless she continues to go to school. The only plus gained in making the change of beneficiary is that those schools that require PROFILE will not see those funds as under the daughter's name and will not have them in mind when giving financial aid. Though 529 money, strictly speaking, is a parental asset when the student is not the owner, most PROFILE schools have the flexibility to take into account assets that are not really counted for aid calculations. This goes for pension monies as well. THough pension funds do not count, you had better believe that a huge retirement account can make a difference in aid awards at those schools that have to watch their money. </p>

<p>DO NOT TAKE THE FOLLOWING AS ADVICE--IT'S JUST OBSERVATION, NOT FACT.</p>

<p>What I have seen here in NY with kids who have a parent in NY and one in CT (happens alot), is that the kid claims the residency of the parent with whom he has the best deal in terms of college. In fact, I know a number of kids who have claimed state residency of a non custodial parent in any number of states. My cousin has a son going to a NY state school, pays NY state tuition when she and her son have lived in Delaware for many years. The non custodial, and pretty much uninvolved dad is a NY resident. And the kid did graduate from a Delawared high school. A good friend of mine has a stepdaughter in CT who going to a NY state school with pretty much the same situation. Ny, does not seem to go into detail in determining who is the custodial parent in granting in state tuition. Again, I am just giving you anecdotal situations, and not a general rule. Neither of the above families, by the way, think they are "getting over". They went about this just thinking they had the right to do so.</p>

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<p>my daughter did not apply to any state schools except in Florida. Most are private colleges. I really do not know if the schools she did apply to only require the Fafsa but assume that they all will require their own forms to be filled out as well (you call that CSS?). If I am the custodial parent then only I have to fill that out. Correct?</p>

<p>I do not own any property or have anything at all together with my ex husband. I would prefer that he be the parent to fill out the Fafsa forms regardless that she spent most of the past year with me. But it may not be what happens.</p>

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<p>If the school requires the CSS profile or their own institutional aid form because they disburse their own funds, the school will request information on the income and the assets of both you and your ex. One parent will file the CSS profile and the other parent will file the non-custodial profile (both are on the college board's website).</p>

<p>Your best bet would be to go to the FA section of the schools that your D is interested in and see what form(s) they require. </p>

<p>Keep in mind that the only thing the FAFSA does is determine whether you are not you are eligible for federal aid (Pell, stafford and perkins loans). Most FAFSA only schools do not meet 100% demonstrated need, you it is also in your child's best interest to sit down and determine what you as her parents are realistically willing to pay/borrow to finance her education.</p>

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<p>You're the custodial parent. FAFSA guidelines:</p>

<p>"If your parents are divorced answer the questions about the parent you lived with more during the 12 months preceding the date you complete the FAFSA."</p>

<p>That would be you, from what you've written. I don't think that the college will care that she graduated from a high school in a different state than the custodial parent. Your income is low enough that you should be eligible for significant financial aid. If you apply to a school that requires both parent's income and assets, your ex's income & assets also sound low enough that you'll be eligible for significant aid.</p>

<p>The 529 is what it is, at this point. It won't be an issue on FAFSA at all. On Profile, you'll need to look carefully to see whether it needs to be reported as an asset of the ex, or not. Guidelines on reporting 529 assets are complicated and changed recently.</p>

<p>Good luck-- I think you'll likely end up with a low EFC and some good financial aid offers.</p>

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<p>The CSS Profile is a form put out by the College Board. College forms are put out by the colleges. Most private schools require one or the other, but there are some that require the FAFSA only. If the CSS or a college finaid form are required both the custodial parent and non-custodial parent will be required to provide their financial information. Since the OPs daughter is now living with mom and lived with dad for many years prior, it would be hard to prove that one parent wasn't involved and should receive a non-custodial waiver of these forms...in my opinion. So both parents income and assets would need to be reported. The OP needs to check the college websites for the forms required and the deadlines for receipt of those forms, as well as supporting documentation (some schools require a year or even two of signed tax returns).</p>

<p>I hope, for the sake of the student, that SBlake is correct and this student receives aid. The OP and her ex husband should be aware that they will need to report their financial information fully and accurately on all forms they fill out. This means that if a school form or Profile is required, both parents will need to include income and assets including the values of the two owned properties. I'm not sure how the 529 figures into this. They should also check to see the %age of aid the schools offer to students. As pointed out, the FAFSA is used for federally funded programs. The Profile and school forms are used by the college for institutional funding...and the schools can use the information on them in any way the school chooses. </p>

<p>It seems to me that the EFC per FAFSA will be low regardless of which parent is the custodial parent (unless there is something about the husband's business and assets that isn't clear here). If these folks filed a 1040 EZ wouldn't either of them be eligible for the simplified needs test (meaning that their assets wouldn't be considered)? Someone with more knowledge about this can respond. </p>

<p>Re: the 529...there was mention that the father wanted to give this to the student after graduation..or later. I thought this couldn't just be gifted as cash...but had some restrictions on how it can or can't be dispersed. I am still troubled that this family saved this money for this child's college education and now doesn't plan to use it for this purpose. Why??</p>

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<p>If dad doesn't spend 529 on college but pulls all the $ out I believe he has to pay income tax on the earnings plus 10% penalty on earnings. And there might be state penalties as well. So kind of bizarre to have it in there in the first place if it won't be spent on college. But the dad here seems to have a lot of financial issues the OP and her kid might be better off not knowing about.</p>

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<p>There seems to be a lot of confusion about 529 funds from what I am reading on this site. The whole purpose fo the 529 is to PAY FOR COLLEGE. That is why the contributer to the fund gets the tax benefits. To encourage saving for college, these funds are in the owner's name, not the beneficiary's. However, it is very clear if the funds are NOT used for college, there are penalties that will reduce the fund considerably, not to mention creating a tax nightmare. Muffy has that right.</p>

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<p>can the $ in a 529 be used to pay off student loans?</p>

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<p>^^^^ no, just room, board, tuition, fees, supplies. There's a time limit that expenses incurred in a certain year have to be paid from the 529.</p>