FAFSA | umarried, never married, domestic partners, separate tax returns

Paying for College FAFSA & CSS Profile
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So, working on the FAFSA application for our son, when we ran into a situation that seems to have ‘stumped’ the support representatives for FAFSA (we talked to 3 different individuals).

FIrst, the basic story. Like a lot of folks, we (parents) are unmarried, living together, and jointly support our son financially (including planning for his university education). According to FAFSA, we are ‘married’. Fine, except that the IRS import tools in the FAFSA application assume that if you’re ‘married’ that you filed a joint federal tax return with the IRS. Wrong assumption. We file separately.

And this is where we’ve ‘broken’ FAFSA. The representatives we spoke with all gave us 2 choices: (i) we declare ourselves, de facto married and then manually enter everything from our separate returns, or (ii) simply use the information from one of us.

Yup, option (ii) means being dishonest. Basically, (and this is a verbatim quote), ‘FAFSA relies on the honestly of the applicant(s)’, and they have no way of knowing, if you go with option (ii), if you’re in fact de facto married, married but living separately, or anything of the sort. They have no clue what the actual financial circumstances are, since their ‘knowledge’ is predicated on ‘single return for single parent, joint return for ‘married’ parents’. They have no accommodation for confirming you’re ‘married’ if you file separately.

Seriously – confirmed by 3 separate FAFSA representatives, who when we pointed this out, all acknowledged its sort of a loophole. So, suppose I make 80K, and my domestic unmarried partner makes 40K. If we are honest, and do all the manual work to enter, our ‘joint’ level of support is 120K. But if we simply check the boxes as ‘unmarried’ (which is true), and then suck in the one return that FAFSA lets you import, you pick the 40K person, since 40K is ‘poorer’ than 120K, making you more likely to get aid.

Unless you’re honest. Which the FAFSA reps said they have no way of checking.

Now, how stupid is all this?

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@kelsmom can clarify.

Since you filed taxes separately, IIRC, you will need to manually enter your info on the FAFSA…and yes, you include both of your financials, not just one. This I believe is the same for any set of parents living together (married or not) who file separate tax returns. You can’t use the IRS Data Retrieval Tool…at all.

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Also if you apply to any schools that request CSS- they will also take into consideration everything - every little financial detail for both people, doesn’t matter what the marital status is.

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Indeed – this much we gathered. But what stunned us is that all 3 representatives implied that using option (ii) – simply pulling in one parent’s return – is an option (in fact, one even encouraged us), since they have no way to verify marital status of the applicant if the parents file separately. The entire system is predicated on entirely outdated norms (single - 1 return, married - 1 joint return), and is begging for people to game the system.

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True, FAFSA peeps won’t catch it, but others might.

If you are applying to CSS schools, they may figure things out (for example because parents have matching home addresses) and tell you that you filed FAFSA incorrectly.

Even for FAFSA only schools, which often don’t give much need based aid, the school your kid attends may ultimately figure out that FAFSA was incorrectly completed as well, again in any number of ways, but the unmarried parents having the same address will likely give it away.

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I don’t believe this is true. The DRT was never able to be used even for married parents who file separately…and there are plenty who do for some reason or another.

@kelsmom

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There are lots of times the DRT system can’t be used, like if you file a correction or amendment, if married parents get divorced in the year after filing, if there was fraud on the filing. It’s unfortunate, but happens.

There used to be a loophole for those living with both parents who weren’t married, and the FAFSA only took one income. That was unfair to all those poor unfortunates who were actually married. I think they changed it in about 2015 or 2016. My sister and the father of her children weren’t married and each owned a house in their own name only. They had each claimed one child on taxes (filed individually) so each child could easily file FAFSA. They weren’t getting any Pell grants or need based aid, but filed to get the loans.

So it was determined this wasn’t a true representation of the family income and the rule was changed. No way to import two tax returns to the FAFSA website so you have to do it manually.

IMO, the FAFSA workers telling you to just use one income are incorrect. They may be working off old information when it was allowed.

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It doesn’t sound like FAFSA told OP to do it that way, just if they do, FAFSA peeps won’t ever catch it.

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I won’t comment on what the FAFSA people told OP. In my experience, sometimes questions are asked in a way that leads to misinformation being given - not necessarily on purpose on the part of either party, but rather a misunderstanding. Or it could be poor training, new reps, etc. Whatever … here’s the real answer: As of today, anyone who needs to provide tax information for two parents but files taxes separately, and anyone who filed an amended return, is unable to use the Data Retrieval Tool. Information for both parties must be manually entered. It’s not a loophole, just the reality of the system. There are a lot of things that might not get caught if one neglects to report them on their FAFSA … but when you sign the FAFSA, you certify that you have told the truth.

There are some major changes coming to tax retrieval in 2024-25. I think I read that both parents will be able to have the IRS provide their respective tax information even if they filed separately. I could be wrong, but I think that is on the horizon. It will be well publicized if it does come to pass in the future.

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