Legal Separation & Financial Aid

Paying for College
41

<p>Wolverine86:

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<p>Our kid is interested in attending a decent & safe State university that we can afford with a good programs in math & the sciences - math, chemistry, biology, engineering . (pre-med is not in the works) There is no particular place anyone in this household has our hopes set on … as I mentioned before we’ve been gypsies for over twenty years anyway.</p>

<p>MOM2COLLEGEKIDS:

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<p>Already been discussed numerous times over the past year or so. D has near-zero interest in her school other than the academics (which btw is pretty good) and the theatre program she is in for fun … not into sports, school spirit, rah rah rah, etc … so long as she any new school has good academics she’s fine with it … says she looks forward to it in fact and has been itching to move again for several years. </p>

<p>Calling me “insensitive” is a a little bit of an overreach considering how little you know of our family other than what I’ve posted on here thus far.</p>

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<p>*Those kinds of things can undermine the way she looks at marriage and men, whether you realize it or not. *</p>

<p>Excellent point!</p>

<p>If you were to say, "We’re going to move to State A now before D takes the PSAT because it has a lower NMSF cutoff, then fine. No problem.</p>

<p>There’s a mom on this board that moved her kids to a state that has super public Us and excellent aid because she knew she’d need it. No problem.</p>

<p>But, what you’re suggesting is unethical.</p>

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<p>2CollegeWeGo:

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<p>Thank you, “2CollegeWeGo”. That’s very constructive, informative, & nonjudgemental information.</p>

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<p>Does anyone else wonder how this young woman is going to feel when mama moves to the town she’s going to school in? What’s going to happen if she wants to transfer? I know it seems like a good plan now, when she’s just a junior, but as the mother of several college kids I can tell you that girls - even fairly quiet, “good girl” types like my D - need to grow up and get out of the nest to really get their feet under them. No matter how wonderful and close the relationship with mom remains, they really do tend to blossom into the confident, independent women we want them to be if they are given the space to do so.</p>

<p>Plenty of schools offer merit aid and it’s usually far more generous than grant aid if the kid has good stats. In your case, sounds like state grant aid would be nil anyway and federal aid would, at best, amount to only a few thousand a year under this plan of splitting income/assets. I think it would be more traumatic and confusing for your D to wonder why her parents are separating right before she’s ready for college - not making moral judgements, but I don’t think you’re really thinking of it from her perspective (it’s tough to think like a teenage girl if you’ve never been one!) I think this could come back to bite you down the road in a number of ways. Just my $.02.</p>

45

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<p>I consider it insensitive to try to game the system to take away from kids who actually NEED the money. </p>

<p>And please, don’t call yourselves Gypsies unless you really are a Romani family or some other Gypsy subgroup- or at least have the decency to capitalize it. It’s kind of an insult to call yourself a heritage because you have some characteristic of that group imo (and it’s personal).</p>

46

<p>I think your daughter has a good chance of getting some merit aid…there are so many good schools that might offer a high performing student such aid. If you let folks know the types of schools your daughter might consider…I’m sure there will be many suggestions of good programs with good merit aid.</p>

47

<p>There are a whole bunch of threads in this forum on the issue of merit-based aid. Start with this one:
<a href=“http://talk.collegeconfidential.com/financial-aid-scholarships/848226-important-links-automatic-guaranteed-merit-scholarships.html[/url]”>http://talk.collegeconfidential.com/financial-aid-scholarships/848226-important-links-automatic-guaranteed-merit-scholarships.html&lt;/a&gt;&lt;/p&gt;

<p>Since you seem to like to do research, here are links to two older threads that describe unbeatable research strategies:
<a href=“http://talk.collegeconfidential.com/parents-forum/148852-what-ive-learned-about-full-ride-scholarships.html[/url]”>http://talk.collegeconfidential.com/parents-forum/148852-what-ive-learned-about-full-ride-scholarships.html&lt;/a&gt;
<a href=“http://talk.collegeconfidential.com/parents-forum/291483-update-what-i-learned-about-free-ride-scholarships.html[/url]”>http://talk.collegeconfidential.com/parents-forum/291483-update-what-i-learned-about-free-ride-scholarships.html&lt;/a&gt;&lt;/p&gt;

<p>To have a clearer understanding of how the FAFSA works, print out the current formula, and work through it on paper. You may have better options for improving your financial situation than you think you do right now:
<a href=“http://www.ifap.ed.gov/efcformulaguide/attachments/082511EFCFormulaGuide1213.pdf[/url]”>http://www.ifap.ed.gov/efcformulaguide/attachments/082511EFCFormulaGuide1213.pdf&lt;/a&gt;&lt;/p&gt;

<p>For reliable information about financial aid in general, read through everything at:
[FinAid</a>! Financial Aid, College Scholarships and Student Loans](<a href=“http://www.finaid.org%5DFinAid”>http://www.finaid.org)</p>

48

<p><a href=“http://talk.collegeconfidential.com/parents-forum/52133-schools-known-good-merit-aid.html?highlight=merit[/url]”>http://talk.collegeconfidential.com/parents-forum/52133-schools-known-good-merit-aid.html?highlight=merit&lt;/a&gt;&lt;/p&gt;

<p>Another merit aid thread. At private schools you can get merit aid in the $10-20k category. You are in TX, check out Baylor.</p>

<p>Yes, people who do their taxes can take legal deductions and yes, some people cheat.</p>

<p>There are ways to ethically be efficient on your FAFSA, for example, you could keep your paid off home and not generate that $200-250k asset for financial aid. If it is one home, it does not get counted for financial aid, if you sell the big house and put the same total into two homes, the FAFSA formula will count that 2nd home’s value in your formula.</p>

<p>No one here would have an issue with you reading the rules & the formula and choosing to structure your plan to keep one home for those four years.</p>

<p>There are other ways to reduce your assets, but none of that will make a lot of difference unless your income allows you to qualify for need based aid. Run the numbers on the formula given in #47 and see if your income would ever allow you to qualify for aid- Pell, is there a TX grant? Any other need based aid.</p>

<p>If not, you are correct, that a fake separation COULD theoretically work, except you would have to lie to try to make it work. I have helped friends do the FAFSA, back when it was on paper and seemed more difficult, and I knew a couple working in two different states. They called their DSs school and were asked, “are you getting divorced?”, their answer was NO and therefore they filed both parent’s info on FAFSA.</p>

<p>The thing is, FAFSA is a formula, you can max out a $5500 Pell and perhaps a few other items. A PROFILE school will require both incomes anyway, so you are not talking the HYPS schools with the school making up the difference. Are you really willing to commit fraud for $5500 a year? The FAFSA formula will have some oddities and inconsistencies that seem unfair, but truly, you can get divorced, whether you mean it or not, and you could do what you are proposing, BUT then you cannot have the family on your health insurance. Pick your story, but you have to be consistent. </p>

<p>It sounds like TX does not allow the separation and yes, you could change states, but you need to step back and run the numbers and realize the greater ramifications of what you are outlining.</p>

<p>Once again, no one here is saying not to maximize eligibility on FAFSA, people can take cash out of their bank account and pay it against debt if they want, but there are very few people who are actually helped by that.</p>

<p>Everyone always seems to have a story of someone they know in their town who is cheating financial aid. I always wonder if that family is really bragging about cheating or if it is misinformation similar to the person bragging about an Ivy ‘scholarship’ which we all know is 100% need based, not merit, yet people brag about it.</p>

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<p>Send a message to DadII. He’ll probably have some pointers as to how to help you out with your strategy of how to maximize your need based aid. That said, its pretty unreasonable to come to a site like this and ask what essentially seems to be a question as to how to game the system to look poor on paper, without expecting some well deserved opinions about the intent of the question.</p>

50

<p>The flaws that I see in your plan, while you may win the battle if you can pull this off, you will ultimately lose the war. In order to have a slight chance of working (really really slight, you would have to put your plan into action now because waiting to do this at the beginning of senior year would be too late.</p>

<p>Even is you and your wife were to “separate” she would have to live the majority of the time with her mom as the custodial parent, otherwise yor income and assets will be used to determine her EFC.</p>

<p>Any monies that you give to your wife will be counted as income for financial aid purposes</p>

<p>Even if your wife were to become pell eligible, your daughter would not get enough money in Pell grants to make an appreciable difference for all of the trouble you are going through to get it.</p>

<p>married people have a larger income allowance than single people. </p>

<p>Lets say that your wife “retires” and movse to Florida; her simply living in Florida with out a job and without your daughter graduating from a high school will nto get your daughter in-state tuition. </p>

<p>If you leave the state of Texas and are no longer a resident, your daughter will no longer be eligible for in-state tuition at UT or A&M causing the cost of tuition to almost triple. Now your daughter will be OOS in two places.</p>

<p>As others have stated, most FAFSA only schools do not meet 100% demonstrated need. They gap and they gap big, so you will still have to make up the difference. The goal of most state universities is to provide an affordable option for their taxpayer base. Unless you daughter is throwing long with a mean rushing game, has a wicked half court shot, is a prodigy or has some special talents that the school is looking for, the only thing a low EFC is going to get her is a couple of dollars in Pell (not enough to make a dent) and stafford loans. Your wife will be offered a PLUS loan to pay of the balance of her cost of attendance.</p>

<p>As others have stated, if you are looking for need based instiutional aid, those schools will require either the CSS Profile or their own financial aid forms and they will still require the income and the assets of the non custodial parents on either the Non-Custodial Profile or the school’s form.</p>

<p>FAFSA is now tied to the IRS. The school will require copies of yoru wife taxes. In addition, they can ask for any other documentation that they choose; bank records, deeds, mortgage statements, so the truth will eventually be told.</p>

<p>Finally, willful misrepresentation on the FAFSA is a Felony punishable by fines and jail time for you, your wife and your daughter (as your daughter and one of her parents will have to the fact that the information on the FAFSA is correct and true). All monies given to your daughter based on fraudlent information will have to be repaid and she will be ineligible for financial aid in the future. In addition, misrepresentation on the Financial aid forms can lead to your daughter being dismissed from college or having her degree rescinded, leaving her with a worthless piece of paper. Do you really want to subject your daughter to this?</p>

<p>Please weigh the little bit of $$ that you will get in the short term against the long term consequences that it can have for your family, specifically your daughter.</p>

51

<p>Nice post, sybbie.</p>

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<p>Actually…mymail…worth checking. Depending on your daughter’s SAT scores and GPA…she might want to apply to one of the VERY generous schools that meets full need, and provides need based aid for families earning sometimes up to $120,000 a year. For example, if accepted at Stanford, she would only pay 10% of your income (assuming “typical” assets) to attend. The same is true for Harvard and Yale, I believe. </p>

<p>If she does achieve NMF status, she would get 1/2 tuition award at University of Southern California (USC). </p>

<p>I think there are MANY avenues for your daughter to gain some very fine aid at some school. If she is looking to stay in Texas, you might want to check Trinity in San Antonio. Your daughter might get a nice merit package there that would make the cost of attending very similar to one of the state schools in TX…and it’s a fine school.</p>

53

<p>This thread is a wealth of information! Is sybbie’s statement really true? I imagine this little tidbit would affect lots of people!</p>

<p>"Lets say that your wife “retires” and movse to Florida; her simply living in Florida with out a job and without your daughter graduating from a high school will nto get your daughter in-state tuition. </p>

<p>If you leave the state of Texas and are no longer a resident, your daughter will no longer be eligible for in-state tuition at UT or A&M causing the cost of tuition to almost triple. Now your daughter will be OOS in two places."</p>

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<p>Folks who relocate during a kid’s senior year of high school do run the risk of not being considered “instate” residents in either place. Because they have left state #1…they would no longer be considered residents there. If they haven’t lived in state #2 long enough to establish residency (usually 12 months prior to starting college), they might not be considered instate residents there either for at least that first year.</p>

<p>And something else to check…at SOME public universities…the instate/oos status you have as an incoming freshman stays with you for all four years. In other words, if you are OOS as a freshman…that’s what you are for four years…but if you are instate…you remain so. These policies VARY by college so you would need to check EACH college (note…NOT EACH STATE…each COLLEGE).</p>

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<p>I don’t know Florida policies…perhaps their policy is that a student has to attend Florida high schools for X years to qualify for instate rates??? Don’t know. Or, maybe to qualify for Bright Futures??? </p>

<p>I do think that all of these gymnastics are going to cost more than what they might save. Separate car insurance, separate cell phone plans, selling property, dividing assets, taking spouses’ names off of properties, etc…in order to make this “separation” look legit is going to take time and money.</p>

<p>Because of situations like this, FAFSA should not recognize “separations”…only divorces. With these fake separations, the NCP can take all assets, making the CP look very poor. If a divorce were to occur, then assets would get split, spousal support, etc, would get defined, etc. </p>

<p>Remember that thread about the kid whose parents had been “separated” for years…living in the same house…dad living in the basement with little income. The dad was trying to claim that he was the CP because the mom made all the money. :rolleyes:</p>

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<p>SYBBIE said:

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<p>SYBBIE - I disagree totally & completely with your (and others) assessment of what we contemplate as fraud. Is it fraud if two people go get a government marriage license in order to include one of them no a health care plan … or so they can save on taxes? I’ve also known of people, some with children, living together who actually didn’t go out & get a government marriage license for the reason it would cut somebody out of some legal or financial benefit.</p>

<p>As long as we are within the law there is no fraud. If we are, in fact, maintaining two residences and not living 100% full time in the same household with each other, have completely separate finances … AND we have a legal duly executed legal separation agreement … there is not a thing in the world wrong with it and we are not “lying” on the FAFSA or any other document.</p>

<p>People were married to each other long before the government started issuing them pieces of paper saying they were. I’d rather my daughter see marriage as more than just a piece of paper from the government. Apparently others feel it’s more important to teach their kids that’s what marriage is … a piece of paper from the government.</p>

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<p>MOM2COLLEGEKIDS said:

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<p>Well, the “gymnastics” would not be too big a deal since we have been planning to move anyway … my question is what the benefits might be. A little cost/benefit analysis is what we are doing at the moment. Considering our options.</p>

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<p>I started this thread to ask how a legal separation might - or might not - affect financial aid for college - that’s all - not for child rearing or legal advice or to hear someone else’s personal opinion of what they think is/is not ethical </p>

<hr>

<p>Seriously, you feel that a post such as yours will not prompt a discussion of ethics (or lack thereof)?!</p>

<p>As much as I miss many aspects of the finaid profession, it is this type of thinking that I do not miss. Sorry, but what you are contemplating is unethical regardless of your personal justifications.</p>

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<p>I think you’re confused and this whole point is probably moot since you’re not actually getting a legal separation because TX law does not recognize this concept (I don’t believe that FL does either unless this has changed recently). In states where there is no recognition of legal separation, a separation document in simply treated as a contract and the separation automatically becomes an informal arrangement for FA purposes. TX does not recognize either type of separation for FA and every single state requires that informally separated parties not cohabitate, which is what you would be doing, albeit on a part-time basis. Therefore, unless you truly do not intend to spend another night with your DW, I would say that claiming this to be a valid separation would be tantamount to committing fraud.</p>

<p>Btw, did you know that aid officers have become very suspicious of those who say they are separated but do not intend to divorce? They can, and often will, simply disallow the separated status by invoking professional judgement and there is no appeal from that. If they don’t become suspicious but someone else find out and calls the FAFSA fraud line, you’ll be in even worse shape…you might use the responses here to guage how others are likely to react to your plan as the posters represent a variety of demographics.</p>

<p>I think people are trying to warn you of the pitfalls of this plan but if you’re determined to do it anyway then why continue posting on this thread? I’d say this thread is a dead horse…</p>

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<p>mymail, </p>

<p>Just so you know… Colleges that only use the FAFSA do not look at the equity in your primary residence nor any $ in qualified retirement accounts. They also ignore a certain amount of your assets. The amount that they ignore is based on the age of the older parent and the parents’ marital status. For whatever reason, a single parent’s asset allowance is much less than half of married parents’ allowance. The same is true for the amount of income they estimate you will need to leave off of (“income allowance”). The formula favors married couples.</p>

<p>The generous private schools look at custodial and non-custodial parents and can ask a lot of other, more specific questions so if you have $ in the bank, that may be a harder way to go (although it may be worthwhile for your dd to apply to one of the schools that is very generous like Harvard). By the way, they do usually look at home equity. </p>

<p>Have you looked at Texas’ prepaid plan? </p>

<p>I do have an idea, since Sybbie mentioned FL. FL has a very generous scholarship plan for kids who graduate from high school there and go instate (Bright Futures). Since you are contemplating moving there, why don’t you look into all of you moving there before her senior year? FL state schools are not very expensive for instate residents anyway and the state flagship is very good. (They have several good schools but the state flagship really has a lot of very bright kids who choose to go there instead of a fancier, private out-of-state college because it’s so inexpensive.) Your daughter could proudly be among the many Florida kids who can proudly say she has a generous merit scholarship. </p>

<p>[Bright</a> Futures Scholarships](<a href=“Home - Florida Student Scholarship & Grant Programs”>Home - Florida Student Scholarship & Grant Programs)</p>