FAFSA/EFC and how many kids you can claim in college in a divorce/remarriage/step kid situation

Paying for College
1

Hopefully this is the right spot for this question, if not feel free to move

I have 2 stepchildren. One of which their mother claims as a dependent tax deduction and one of which my husband and I claim.

The mother filled out the FAFSA for both children using her (retired) income and assets. My husband pays 50% of all college costs for both kids (one recently graduated). The mother did not include any of our income information on the FAFSA, never asked for it and it’s never been provided to her. I am just now learning this.

I am now looking at schools for my S17 and had assumed that for his freshman year we could claim 2 in college (DSD19 will be a senior that year). This significantly effects our EFC for S17 if we cannot claim her as a child in college for at least that year and as a result will likely dictate the removal of certain schools from consideration as the EFC is no longer cut in half. DSD19 does not get any grant or aid monies as a result of her mother using her info instead of ours (or not including ours) but does have a small scholarship (2K). DSD19 is the child we claim on our taxes.

As I am the only one who will be paying for my 2 to go to college, unlike the steps who had it split, I am understandably upset learning all of this now and realizing that my oldest may be quite hamstrung in options since unlike the ex, I can’t use just my income. Having never filled out a FAFSA before (beyond the sample tools and calculators of course) I am not clear on how the “number of children in college” aspect is validated.

Can we claim her? Or am I screwed? H will absolutely not go tell the ex to use his info on this years FAFSA, he’s livid that I am upset about it as it is. Ex feels they should be full pay regardless so balked at filling out the FAFSA period. If we do claim her, will that mess her info up? UGH!!!

Any insight would be tremendously appreciated.

2

With whom does your stepdaughter live?

3

If the step children reside with their mother most of the time…she was correct in including only her income and assets on the FAFSA form. That is what she was supposed to do. The FAFSA uses the custodial parent info only.

In terms of what you can do…or can’t do…I believe it has more to do with who lives in your household than who declare who on taxes. Taxes and financial aid are two separate things…

For FAFSA purposes, I believe you can only include members of your household. So…if the other kids do NOT actually reside with you most of the time, I don’t think they can be included on your FAFSA for the kids who do reside with you.

@kelsmom or @BelknapPoint what do,you think?

4

It doesn’t matter who claims who as a dependent for tax purposes. When parents are divorced, the student completes FAFSA using the income and assets of the parent (and that parent’s spouse, if applicable) with whom the student lived with most during the preceding 12 months. If both of your stepchildren lived with their mother even one day more than with their father for the 12 month period preceding the completion of each FAFSA, then only the mother’s financial information is properly reported on FAFSA.

5

We have 50/50 custody and she is at school the majority of the time. She is claimed as a member of our household with the IRS.

6

I did find this online

Divorce and Financial Aid

This page answers common questions about the relationship between divorce and financial aid. It discusses which parent is responsible for completing the FAFSA, the obligations of non-custodial parents to pay for college, college support agreements, the obligations of stepparents, and the ability of non-custodial parents to take advantage of the various tax benefits for education.

Completing the FAFSA

If your parents are separated or divorced, the custodial parent is responsible for filling out the Free Application for Federal Student Aid (FAFSA). The custodial parent for federal student aid purposes is the parent with whom you lived the most during the past 12 months. (The twelve month period is the twelve month period ending on the FAFSA application date, not the previous calendar year.) Note that this is not necessarily the same as the parent who has legal custody. If you did not live with one parent more than the other, the parent who provided you with the most financial support during the past twelve months should fill out the FAFSA. This is probably the parent who claimed you as a dependent on their tax return. If you have not received any support from either parent during the past 12 months, use the most recent calendar year for which you received some support from a parent. These rules are based on section 475(f)(1) of the Higher Education Act of 1965 (20 USC 1087oo(f)(1)).

Biological parents who never married are treated the same as parents who are divorced.

Note, however, that any child support and/or alimony received from the non-custodial parent must be included on the FAFSA.

Please note that the discussion given above applies even if the parents each have equal 50% custody. The term “custodial parent” is not synonymous with custody. Usually the parent with whom the student lived the most during the past 12 months is sufficient, since there are an odd number of days in the year. However, in some cases a tie-breaker is needed, such as when the divorce was recent or when there are an even number of days in the year (e.g., a leap year). In such circumstances it is based on whichever parent provided more support. If that is not definitive, then the financial aid administrator at the college will make the decision, and this will usually be based on whichever parent has the greater income. (Some colleges will follow the logic in a multiple support agreement, but they are under no obligation to do so.)

Financial aid applications can be somewhat confusing because there are several different criteria applied for different kinds of parenthood:

  1. The parent with whom the child lived the most during the past 12 months (the 12 months ending on the FAFSA application date).
  2. The parent who provided more financial support to the child during the past 12 months.
  3. 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.
  4. The parent who provided more than half the child's support (and will continue to do so).
  5. The parent who has legal custody.
  6. The parent who claimed the child as a dependent on their tax return.
  7. The parent with the greater income.

As noted above, criteria 1, 2 and 3 are used for determining the custodial parent, with the first criteria being primary. In a situation where the parents split all costs equally (without even a penny difference), criterion number 7 is often used.
For determining household size (the number of family members), criteria 4 is the most important. However, the student’s custodial parent gets to list him or her even if the custodial parent does not provide more than half of the student’s support. This leads to the anomalous situation where a student can be counted as belonging to two different households. For example, suppose the non-custodial parent remarries and has college-aged children of his own. If the non-custodial parent provides more than half of the student’s support, the non-custodial parent gets to list the student as a member of the non-custodial parent’s household even though the custodial parent has also listed the student as a member of the custodial parent’s household. (The IRS tax return instructions prevent this kind of double dipping on tax returns, but the FAFSA instructions apparently don’t.)

7

None of that matters. Court custody orders do not matter. Tax dependency and exemptions do not matter. For FAFSA, the only thing that matters is which parent the student spent more nights with during the 12 months immediately preceding filing of the FAFSA. If she spent 12 nights with her mother, 10 nights with her father, and 343 nights with neither (i.e. at school, with friends or other relatives) during that 12 months, than the mother is considered the custodial parent for FAFSA purposes and the mother’s income and assets are used in completing FAFSA.

8

The question is really about whether or not she can be claimed as part of our household on the FAFSA and as a child in college. It has a dramatic impact to the EFC and as a result, the entire financial picture of what schools S17 can even consider looking at.

9

So who did she spend more nights with?

10

Does your husband (or will he) provide more than half of DSD19’s support, even if her mother is considered the custodial parent for FAFSA purposes? If the answer to that is yes, it sounds like you can claim DSD19 as a household member when you complete FAFSA for your S17.

11

Just be very prepared to be able to document your expenses if you claim this student on your FAFSA. You may be asked to do so.

12

The expenses and paying for more than 50% of the costs only matters if the student spend exactly the same amount of time with each parent. It is a tie breaker, not a factor. If the student spends even one night more with parent A than parent B, parent A is the FAFSA parent even if parent B pays 100% of the student’s expenses.

From OP’s #5 above:

OP, you say it makes a big difference for your son, but what about for your stepdaughter? If she’s in your household, she’d have to file FAFSA using your and your husband’s salaries. If her mother’s is a lot lower, she may be getting Pell, SEOG, work study based on that. Yes, if she is part of your household she’d get to claim your son on her FAFSA too and her EFC will be half, but if your EFC is $30k with one student so $15k with two, that may not be a better deal than she has now with her EFC just based on her mother’s lower income.

13

Even if your step daughter were to be considered a member of your household this year, how will you be able to afford years 2, 3 and 4 for your son if this is so crucial?

14

No she won’t. Stepdaughter can use her mother for custodial parent on FAFSA and still be included as a member of her father’s/stepbrother’s household when stepbrother files FAFSA.

15

How? If the stepdaughter spends one more day with father’s household to be in household for stepbrother’s FAFSA, then she meets the custody definition for FAFSA for herself too, and that makes her father the filing parent for FAFSA.

16

You are mixing up the custodial parent requirements with the member of household requirements. Go back and read through the thread.

17

<<<<<
This significantly effects our EFC for S17 if we cannot claim her as a child in college for at least that year and as a result will likely dictate the removal of certain schools from consideration as the EFC is no longer cut in half.
<<<<

???

How can you afford your son’s soph, jr and sr years if only the FIRST year his EFC is cut in half during step-daughter’s senior year?

Once she graduates, and your son is a junior, then suddenly the EFC doubles. How can you afford the school then?

18

The reason that you can’t just put your income on FAFSA is because that would mislead the calculations into thinking that only your income pays the rent, the utilities, the upkeep, and the food in your home. That wouldn’t be true, right/ Your husband’s income is also paying for rent, utilities, food, and so forth in your household right?

If your income is (for example) $50k, then only using your income would suggest that after your $50k pays for ALL HOUSEHOLD costs, you would have very little to put towards your child’s income. But the truth is, you really would have more to put towards college because your husband is helping pay for those expenses.

Were you a widow before? If not, why isn’t your ex helping pay for your children’s college?

19

^It’s all in the quoted passage, it explained how someone could be a household member on two FAFSAs.

But, what schools would your son be looking at otherwise, only FAFSA schools? Because if you are worried about FAFSA EFC and aid, you must be expecting to qualify for federal and state aid.

Schools that give institutional aid will most likely not only consider FAFSA, but also their own aid forms or CSS profile.
They might consider home equity as well.

When you run a net price calculator on a private college website and then on a public instate college website, what numbers do you get for your family income and assets?

20

It makes a difference in the full list of schools. If the EFC is 32K, versus 64K, for a higher tuition school it is absolutely a deal breaker. Can I pay for college? Yes. On my salary alone, can I pay 64K a year for one child? Absolutely not. Ludicrous. 32 is pushing it. Our income is not split 50/50 to say the least. It is a significant limiter. Are there schools that will work for this child that I can afford? Yes. Is it the full list of what he would like to look at and what I thought I reasonably could? No. No, because my base assumptions were incorrect. As a single mom for several years, and an economy layoff early in my remarriage years for myself, the college savings simply aren’t what they could be though they do exist.

It is fairly ridiculous to me that I am penalized by a system that allows for the mother, (who I agree from a FAFSA custodial standpoint has technically more than 50% of the nights in her home) to reasonably argue she has more than 50% of my stepdaughters support (though not by much financially), yet allows for zero “credit” for the other parent footing half the bill. It is a bit of a sucker punch that my husband can pay a full 50% of the college tuition and expenses yet not be able to claim that in any fashion and I am the one penalized. There is no opportunity to document that the 2nd income, larger, of my house is paying for tuition elsewhere and there will be zero contributed to my sons expenses.

It kills me that my child’s college list has to be limited by this. There is a school that has to be cut from the list and it’s going to hurt him quite a bit as I thought he could at least apply and grants could potentially make up the difference. No guarantee he would get such grants of course but at least the potential seemed to exist. Given this, he will clearly not be eligible for those so applying is not an option. It is not a school that grants merit aid. There is a upper choice school that will be a stretch, a little bit would have helped quite a lot or at may have allowed for a subsidized small student loan versus unsubsidized.

It is probably just as annoying that this is the situation I am in, knowing that the my husbands ex would vastly prefer not to file a FAFSA at all and would rather brag about being full pay. Which is crazy to me, why leave money on the table if it’s there? That doesn’t change the facts though and I recognize that now that I’ve gotten over the emotional gut reaction.

Yes, my stepdaughter will be a senior when my son is a freshman. He has a younger brother following him so when he is a junior, I will have two in college that I can “officially” claim. I expect her to go to grad school. In that scenario, if she did 1) go to grad school or 2) not graduate in 4 years and IF we were able to claim her as a student in school then I would only run into issues for the last few years of the youngest at a higher tuition school, again assuming my oldest graduates on time. Given that is not the case I simply can’t risk it for 2 years on one end for the oldest and 2 years on one end for the youngest. I have zero interest in taking out loans and zero interest in offering/paying more for the youngest simply because he will get the benefit of overlap when it’s his turn to apply.

I will just have to live with it. But it seems spectacularly unfair. Somehow a deadbeat dad + a remarriage to a dad who honors his commitments to his own kids (as he should), yet an ex who technically has more than 50% of the nights, leaves me and mine holding the short end of the stick. I know what I signed up for in this deal, I just didn’t expect the kind of numbers I am seeing and clearly naively assumed that we would be able to claim her as a college student from a FAFSA perspective. I suppose we could try to claim the college expenses as child support on my sons FAFSA but the overall benefit to the EFC is not nearly the same and not enough to have an impact on the schools on S17’s list as a result.

I’ll get over it (mostly) but it doesn’t sit well. It’s a system fail in my opinion. The youngest has much greater aspirations than the oldest, it is a greater limiter to him and more to attempt to make up elsewhere. It is what it is. Either way, we will go for what scholarships and merit aid we can but I suspect it will be a lot of nickels and dimes and work to get much.

All that said, better to know this all now, bitter pill as it may be. At least two schools off the list and one is pretty borderline now. One we had planned to tour in April that while his interest is not huge would have been fun to see the town and school (and was on our way to another tour) however given this development, there is no point in visiting, even to simply drive by. Not thrilled with having to explain the why.