FAFSA -- Divorced parents with 2 kids- whose income

Hi All,

Am new to this forum and just starting the college search process for my elder kid who is a HS Senior now (graduating from high school next June 2021)

Parents divorced in 2011 and have equal custody on their 2 kids.

Both parents are single now and claims as head of house hold.

On tax returns Mom claims Elder Kid who is High school senior & Dad claims younger Kid who is in 5th class now.

Dad makes 150k and Mom Makes 130k before 401k contributions.

I was told earlier for FAFSA, only custodian parent income will be considered. So its only Mom’s income need to be filled up and which will be in consideration as kid is on her tax returns and other kid is in Dad’s tax returns.

Is my understanding correct? What are chances getting need based aid.

Given the interest in medicine, I am thinking to get the undergrad degree as cheap / free if possible.

The FAFSA parent is the one with whom the child lived the most in the twelve months prior to the day you complete the FAFSA. It doesn’t matter who claims the child for tax purposes.

Many schools (mostly privates, a few publics) also require CSS Profile in addition to FAFSA. Profile requires financial information from both bio parents, as well as any step-spouses.

You can use the net price calculators (NPCs) on each school’s website, but for Profile schools would need to include financial information from all adults to receive an accurate estimate of costs.

For FAFSA only schools, only mom’s finances would be necessary when filling out the NPCs.

Why assume Mom? OP says parents have equal custody … so they have to determine in which home the student spent the most days the prior year.

Just because that’s how OP characterized it later in her post ‘So its only Mom’s income need to be filled up…’

But you are correct, custodial parent for FA forms would be as you say… who the kid spent most days with during the previous 365 days, and has nothing to do with who is claiming the kid on their taxes.

Thank you so much for your suggestions.

Yes elder kid lives mostly at Mom’s place over 50% of the time.

Are you expecting a ton of need based aid with one student in college?

You have gotten your answer…the parent with whom the child resides greater than 50% of the time is the one used. If it’s really equal time, then the parent who provides the most support is used, and that usually is the parent with higher income.

For Profile schools that require non-custodial parent Profile, the financials from both parents will be required.

Given the interest in medicine, I am thinking to get the undergrad degree as cheap as possible. Hence wondering how much we can get and options… Kid stays most of the time with mom . Maybe more than 80%.

Hence checking whose income we need to mention on FAFSA and how much we can get approx on financial aids.

Colleges using CSS Profile may or may not require the non-custodial parent finances (but most of the colleges commonly claimed to give good financial aid do). See https://profile.collegeboard.org/profile/ppi/participatingInstitutions.aspx – the third yes/no column indicates whether the non-custodial parent finances are required (but verify on the college’s own web site, since there have been mistakes or outdated information here before).

Colleges may also use their own financial aid forms; those that do may or may not require non-custodial parent information, or require it in some circumstances but not others.

http://talk.qa.collegeconfidential.com/financial-aid-scholarships/2083835-faq-divorced-parents-financial-aid-and-net-price-calculators.html may be helpful with what to do for college financial aid with divorced parents.

OP, hopefully your elder child is doing well enough in HS to warrant some good merit aid. That may be the better way to search with two relatively high incomes.

For colleges that consider only custodial parent information, the parental income will be $130k or $150k.

For colleges that consider both parents’ information, the parental income will be $280k.

Be sure to use the appropriate parental income for each college’s net price calculator, depending on whether it wants the custodial parent only or both parents.

Didn’t the OP say these did NOT include contributions to 401K? If so, those contributions will be added back in as income when the FAFSA EFC is calculated. So if each parent contributed $20,000…it would be $150,000 or $170,000.

@ucbalumnus

What colleges is the student interested in applying to? The vast majority of colleges don’t meet full need for all accepted students. This is why I asked if the family expected to get need based aid. They would not qualify for any federally funded grant money. Incomes are too high. States that award need based grants…ditto like NY and CA.

What is this student’s home state?

Have the two parents agreed on an amount the will contribute annually towards college? Is this money in a 529 account?

Does this student have sufficiently high stats to perhaps qualify for merit aid someplace?

The elder student is looking at colleges now. What schools? Are you being realistic in terms of what you can afford to pay annually?

The net price calculators won’t be accurate for you most likely. Even if you add both incomes together, you should view this as a very gross estimate of your net costs. But you don’t even need to do that for FAFSA schools because they don’t use non-custodial parent financial information, but with only a couple of exceptions, they also don’t meet full need for all.

With $150,000 income (moms including $20,000 of 401 K as an example)…as an estimate the FAFSA EFC will be more than near $40,000 a year. Maybe even $50,000 depending on assets.

This is either a 2 or three person household with only one in college, right?

This is MY guesstimate.

@happymomof1 could you please post the FAFSA formula so this parent can hand calculate.

So your chance of getting need based aid? That depends on the college and it’s aid awarding policies…and the cost.

If the college is $40,000 a year or less, and isn’t Yale or Harvard or similar, your chances of getting need based aid are low, in my opinion.

If each parent contributed to $20,000 for 401k’s…

Final Mom’s income $110,000 and Dad’s income $130,000.

Kid Is in New Jersey.

I would look at Rowan, Stockton, TCNJ. They are typically more affordable than Rutgers.

If the kid has sufficiently high stats, the kid might garner some merit aid.

I’m confused about your 401k contributions. What is your total income including these tax deferred retirement accounts. Any money you contributed to them in 2019 will be included as income in the FAFSA formula.

Thank you . Ideally kid is staying with mom most of the time and even on her tax returns as dependent. Hence wondering about need based as well.

You can calculate the FAFSA EFC—the formula is available. Use the 2018 race return numbers for income. Yes, 401k contributions made have to be added back to the income. Also any child support paid has to be included.

The Federal Government has only PELL grants and loans available as financial aid. Doubt very much if this student will get any PELL. And we are talking about, at most $3500, in subsidized loans as a freshman, $5500 in loans altogether that first year, so really a drop in the bucket. Do research what your state has in the way of financial aid for college and see if the student qualifies.

Schools that use just FAFSA only do not tend to meet full need. They tend to give out the federal and state entitlements , and then it can vary greatly what they give out of their own funds. Run the NPCs for the FAFSA only schools and you can get an idea what they might give.

@cptofthehouse if they are doing the 2021-2022 FAFSA, they need 2019 tax returns, not 2018.

And these parents are divorced…npcs probably won’t be accurate.

@Later2021 the tax dependency status for income tax has NO bearing on which parent goes on the FAFSA. For FAFSA purposes, students of divorced parents use the parent with whom they resided greater than 50% of the time for the year prior (the 365 days prior) to FAFSA filing date. That is the rule.

And gain, please clarify, what is are the incomes INCLUDING the contributions to 401K plans. You don’t take that amount out. Those contributions made in 2019 will be added back in as income when your FAFSA EFC is calculated.

Also, if you pay child support and/or spousal support to the parent filing the FAFSA, that must be reported as well. This would be the amount paid in 2019.

And again…I ask…what is your budget for college costs? Your student needs to know that budget.

https://ifap.ed.gov/sites/default/files/attachments/2020-08/2122EFCFormulaGuide.pdf

Print it out. Work through it on paper and see what your numbers look like. Your kid will qualify for a student loan, but I don’t think there will be any other federal aid coming.