So let me get this straight. If you’re poor and have 51% custody of your kid, your kid’s father can be Jeff Bezos, and your kid would still get financial aid? Talking about FAFSA-only schools, not CSS schools. How can there be such a huge loophole? Please help me understand. Thanks.
The government has developed a system of determining eligibility for federal aid that helps the neediest students in the simplest way. Some not-so-needy students do slip through, but research shows that the number is minimal.
FAFSA is used for federal aid eligibility. Schools can use the FAFSA information to award their own aid, and most do … but most financial aid packages from FAFSA-only schools will leave a gap in funding. This is because the school doesn’t promise to meet need. The vast majority of schools that meet need use the Profile or their own financial aid form to further vet students for institutional aid. Many of these schools require non-custodial parent information.
The bottom line, though, is that no system is perfect.
The new tax laws may be a new loophole for the newly divorced . I have a wealthy friend who just got divorced under the new tax laws alimony doesn’t go under income so even though she gets over 100k a year in alimony her income on the FAFSA comes up as zero . She just fininshed the application and came up with a ZERO EFC . LOOPHOLE .
Just because you don’t put alimony on your IRS forms doesn’t mean you don’t put it on the FAFSA. FAFSA specifically asks for it. And child support.
I think there are a lot more kids not getting support from the non-custodial parent than there are kids who slip through the system and get FA when they don’t really need it.
FAFSA question 92h would be an appropriate place for your wealthy friend to report her untaxed alimony income. The current FAFSA instructions don’t specifically include or exclude alimony from being reported here, but it wouldn’t surprise me if that changes soon, given the way that the IRS now treats alimony for divorce or separation agreements that were executed after December 31, 2018.
I must have missed that. Where does FAFSA specifically ask for alimony to be reported?
Bezos ex-wife is one of the wealthiest people in the world- I wouldn’t worry about them abusing financial aid.
FAFSA specifically asks for ALL untaxed income to be reported. Untaxed alimony would fall under untaxed income. If the requirements for Automatic 0 EFC are met, though, the untaxed income would not factor in. This may seem unfair, but it’s one of those things that happens. Few will benefit.
Phew!
(Haha)
A zero EFC on the FAFSA is hardly the Golden Ticket anyhow. Unless you’re in a state with a grant program as well you’re usually just looking at a 6K Pell and subsidized loans. For all the schools that meet full need you need CSS as well.