Divorced parent quandaries

Paying for College
1

<p>Greetings:</p>

<p>Please help me understand the financial aid ramifications of the following family situation:</p>

<p>Parents are divorced and have a shared custody agreement (alternating weeks at each parent's house). Through the years, child has spent more time in dad's care because mom is coping with debilitating health issues, but legal paperwork has never been amended to reflect this.</p>

<p>Mom remarried and now spends several weeks at a time with new husband in another state, returns to spend a few weeks at a time with child when possible. Arrangement between parents is friendly and flexible, but child's default primary residence continues to be dad's house.</p>

<p>Dad is remarried, both he and stepmother are employed. Mom's husband also employed, Mom receives disability benefits. </p>

<p>When filling out the FAFSA, who should be designated as the primary custodial parent, if paperwork still states they share custody 50/50 but this is not reflected in reality? Mom and stepdad almost certainly have less money than dad and stepmom, but total combined income of all four will likely be around $150k, possibly somewhat more. </p>

<p>Stepmom always expected that her income would be included in FA scrutiny and that she would be responsible for contributing to college costs. Mom believed that her being unable to work and receiving benefits would assist child in receiving need-based aid, did not think husband's income would be counted.</p>

<p>Child is a pretty strong student (As and Bs), very high test scores, succeeding in AP/Honors classes, but not involved in many ECs. Not much money is saved for college, due to economic downturn, major stock market hit, and ever-rising costs of child's private school.</p>

<p>Any insight about how to maximize financial aid for this family would be appreciated. Family is pretty much resigned to the fact that they will not qualify for need-based aid if and when all four incomes are calculated, though they have heard that some schools do not factor in stepparents' incomes.</p>

<p>All helpful comments and insights (esp. for those who might have experienced similar situations first hand) would be welcome!</p>

2

<p>Sounds like the family that she has lived with the most and who have contributed the most money during the last year has been her dad and his wife…so their incomes would go on FAFSA.</p>

<p>Child is a pretty strong student (As and Bs), very high test scores,</p>

<p>What are her test scores? If they are very high, and she has good grades, then she should look at some schools that give merit scholarships.</p>

<p>It doesn’t sound like this student can count on her families to pay what they’ll be expected to pay when a step parent or step parents’ income is included.</p>

3

<p>Under no circumstances would all four parent’s incomes be used for FAFSA. That would only be necessary for some schools which use the Profile (and require non-custodial parent info). The rules for FAFSA are very clear and it does sound like only dad and stepmom’s income and assets would be used.</p>

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4

<p>First of all, regardless of the legal document, it’s who the child lives with most that determines who the custodial parent is. In this case it seems that the child lives most with the father, so he would be considered the custodial parent for FAFSA and Profile.</p>

<p>FAFSA only requires financial information from the custodial parent (the father) and his or her spouse (the stepmother). It will not require the mother to include anything about her income.</p>

<p>Most Profile schools do not require non-custodial parent information; about a third of them do. If the child applies to a Profile school requiring noncustodial information, the mother and her spouse’s income/asset information will be collected on the noncustodial form, separate from the father/stepmother information.</p>

5

<p>Thank you so much for the information, I appreciate it and will pass it along!</p>

6

<p>Another question: What proof is required re: determining who the child has lived with the most? Seems to me a family in this situation could claim that the child mostly lived with the mother - the income is smaller, and so the child’s need for FA would be greater. I’m not advocating this, because it is dishonest, but if both parents maintain addresses in the same town, who is to say where the child spent the majority of nights, especially if neither pays child support to the other?</p>

<p>RE mom2college kids, the child has not yet taken the ACT, but she did take a standardized test through her private school as a ninth-grader that predicted she would score between 30 - 33 on the ACT. </p>

<p>Thanks!</p>

7

<p>Colleges can look at the high school the kid graduated from and compare that to the stated home address; if it’s in a different city, the college would probably have reason to audit the financial aid application. If it’s in the same city, no red flags would likely be raised. </p>

<p>I’ve read that about 30% of FAFSA applications are audited, and the penalties for submitting false information are severe, so most people fill out the form honestly and ethically (I know you’re not suggesting that this family do otherwise).</p>

<p>If the mother’s address is out of state, she’d have a hard time arguing that the child lived with her more than 50% of the time.</p>

8

<p>What proof is required re: determining who the child has lived with the most? Seems to me a family in this situation could claim that the child mostly lived with the mother - the income is smaller, and so the child’s need for FA would be greater. I’m not advocating this, because it is dishonest, but if both parents maintain addresses in the same town, who is to say where the child spent the majority of nights, especially if neither pays child support to the other?</p>

<p>That’s one of the weaknesses of FAFSA…because it depends on the honesty of those who are reporting the info, some families do lie about this to get more money.</p>

<p>When both parents share custody, I think FAFSA should include both parents’ incomes.</p>

9

<p>Thanks, that’s what I thought, too. Mom maintains an apartment in the town the child lives in, so she has two addresses. I know this family would never want to do anything that was dishonest, they just want to maximize financial aid potential. They are considering the possibility that the child could attend a state university based in mom and stepdad’s state, with the hope that they would qualify for in-state tuition. If possible, that would be a good option for this family, too, because the child would like to go out of her home state for college.</p>

10

<p>Mom2college: “When both parents share custody, I think FAFSA should include both parents’ incomes.”</p>

<p>Yes, that seems to make the most sense to me, too, hence my question. Even if the non-custodial parent pays child support, it seems to me that it would be unusual for those support payments to be so large as to constitute the majority of the child’s financial support in most family situations.</p>

<p>It seems strange to focus on where the child primarily lives, especially if the non-custodial parent has a significantly different income than that of the custodial parent. If, say, the child lives with a lower income mom, yet has a dad who makes big bucks, it seems unreasonable not to include his income in the calculation. If all four incomes are not included in the mix, t seems more fair to calculate both parents’ incomes and leave the stepparents out if it, rather than calculating one parent plus one stepparent and leaving the other parent and stepparent without any obligation to contribute (or to take into consideration for need - clearly, if the non-custodial parent is receiving some kind of government benefit as listed on he FAFSA, s/he cannot be considered as someone who can contribute to college costs, and perhaps need should be adjusted accordingly).</p>

<p>Oh, well, what can you do? Thanks so much for everyone’s insights, I know your comments will be really helpful to this family.</p>

11

<p>The entire EFC formula would have to be reworked…it doesn’t account for maintaining separate residences, having multiple family sizes, etc. Child support is already factored into FAFSA and I’d bet there are many more students/custodial parents who don’t even receive what they’re supposed to from the NCP than there are those who actually receive more than the court requires them to pay. Your friend’s situation is a good one, but unfortunately not the norm.</p>

12

<p>What happens for families who have a genuine shared parenting arrangement? Whose info goes on the FAFSA if the child literally spends 50% with each parent, with each parent contributing equally to his/her expenses?</p>

13

<p>Then it’s the parent who provided the majority of support:</p>

<ol>
<li>The parent with whom the child lived the most during the past 12 months (the 12 months ending on the FAFSA application date).</li>
<li>The parent who provided more financial support to the child during the past 12 months.</li>
<li>The parent who provided the most financial support to the child during the most recent calendar year for which either parent provided more support to the child.</li>
<li>The parent who provided more than half the child’s support (and will continue to do so).</li>
<li>The parent who has legal custody.</li>
<li>The parent who claimed the child as a dependent on their tax return.</li>
<li>The parent with the greater income. </li>
</ol>

<p>[FinAid</a> | Answering Your Questions | Divorce and Financial Aid](<a href=“Your Guide for College Financial Aid - Finaid”>Divorce and Financial Aid - Finaid)</p>

14

<p>Probably in that case it would be the parent with the greater income. Even if they split everything completely evenly, it seems very unlikely that two parents would have exactly the same income. </p>

<p>Whew! Thanks for everyone’s help! I specialize in working with divorced families, and having some good answers (and good places to point them for more answers) is very, very helpful. Thanks again!</p>

15

<p>*They are considering the possibility that the child could attend a state university based in mom and stepdad’s state, with the hope that they would qualify for in-state tuition. If possible, that would be a good option for this family, too, because the child would like to go out of her home state for college. *</p>

<p>They need to look into that. If the child is in high school in her dad’s state, some states will not consider her “instate” during at least the first year when she lives in her mom’s state.</p>

<p>however, some states will…so they need to contact schools and find out.</p>

16

<p>OP, Please realize that the rules for financial aid and the rules to determine instate residency for public colleges are different. In my experience, the public college’s rules for instate residency is more likely to depend on “paperwork”-- very often, residency is the state of the parent who declared the child as a dependant on his/her taxes. </p>

<p>Financial aid paperwork cares very little about official paperwork. In general, the determination is not who has legal custody or what the agreement says-- it is where the child actually sleeps and, if that’s 50-50 who is paying most of the child’s expenses (not who earns more and could pay most of the child’s expenses). </p>

<p>Please look into what the specific college requires for financial aid documents. What I just said applies to the FAFSA. Many schools use only the FAFSA-- but some have their own forms or use the Profile and, in those cases, they may request information about the non-custodial parent’s household.</p>

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<p>And please be very, very aware that a college can be brutal to vicious if they think the student has lied or gamed the system (ie, not only is student booted from the college, but the reason for the boot follows to the next campus – as in “Ms. Smith was dismissed from the college for honor code violations” – which is just specific enough to be a real albatross. </p>

<p>I used to check fishing licenses as a job. You would not believe how easy it is to catch someone from out of state who was buying/using a local license. We booked people into jail over a $10 fishing license fee. Believe me, when the college has thousands of dollars on the line, they DEFINITELY have a number of ways to sort out the fibbers from the truth tellers. Sure, present the best picture – the best HONEST picture.</p>

18

<p>Some states will grant instate tuition if either parent is a resident. Many do not. I think there was a thread on this a few months ago with postings of which states allow it. If you use the college’s search and type “residency + tuition”, it should get you to their policy. It’s pretty easy to tell if a freshman is coming from OOS…the HS is a dead giveaway.</p>

19

<p>*It’s pretty easy to tell if a freshman is coming from OOS…the HS is a dead giveaway. *</p>

<p>Exactly…</p>

<p>My friend’s son lived with her for grades 5th-10th grade. He went to live with his dad for grades 11-12. He wanted to go to college in his mom’s state, but the state’s schools insisted that he was a non-resident at least for the first year.</p>

<p>However, each state has its own rules.</p>

20

<p>The OP’s opening statement is that the student lives with the father. I think that is the bottom line. Rather than trying to game the living situation, the student should familiarize all parental units about the “rules of the game” and get everyone on board in figuring out the best way to get college bills paid. </p>

<p>For instance, the mother may not be able to give an in state residency option – but there may be ways to make the student be a fabulously attractive candidate so that the state university waives out of state tuition fees (which many schools will do for a strong candidate). In the western states, there is WUE which allows for some reduction if a student attends school in a nearby state. Time to hunt down specifics for the school of interest and begin a campaign to show the student’s strengths.</p>