I have a strange question with regard to financial aid. My husband and I started a Virginia prepaid 529 for my step daughter when she was 4 and living in Virginia. We have shared custody of her and at the time and was living in VA. Now she is 17 and living with her mom in AZ. The custody arrangement hasn’t changed, but she lives full time in AZ and goes to high school there. We still live in VA. So, two questions:
can she get in-state tuition in VA and access her full prepaid 529 benefits?
who should complete her FAFSA. I believe it’s the custodial parent, but I’m guessing that would make it harder to prove she deserves VA in-state tuition.
I don’t know about the prepaid plan. You need to check whether VA allow instate status for residency when one parent (non-custodial) resides in Virginia.
ETA…I found this…
So…do you contribute substantially to her support (whatever that means…)?
If you have a specific college in mind, maybe give them a call and see if you can get a clarification on this.
I know students who have gotten in state rates at UVA, Wm &Mary and VTech because a non custodial parent is a resident lives there. Still, the current rules need to be researched because things change.
Who the custodial parent is on FAFSA has nothing to do with state residency. FAFSA has its own definition of who is the custodial parent. Schools have their own particular rules in who gets in state tuition. Those rules can vary from school to school in the same state.
Clearly, in this case, the young woman’s mother is the custodial parent and completes FAFSA. Any child support, money given for benefit of the child, payment of bills for the child by her father and you are reported on FAFSA in various places.
However, UVA and Wm & Mary, as well as a number of private schools will require financial information from you and your husband via CSS PROFILE. Be aware of this.
There are also issues with 529s owned by non custodial parents which is the case here.
529 plans owned by the noncustodial parent have distributions count as untaxed income to the student on FAFSA just like grandparent-owned 529 plans. I suggest you google non custodial parent 529 or grandparent owned 529 and read very carefully how the money is distributed from it or each distribution is non taxed income to the student and half of any amount over $6600 each year goes directly onto the student EFC. There are ways to get around this but you and your husband need to work it out.
I would run some NPCs for some colleges and see if your stepdaughter even qualifies for financial aid at various colleges, state schools in both states as well as private colleges. With two sets of parents, running the NPCs twice, once with the Mother’s financial, then with yours and adding the results will give you some idea of what these schools will expect parents to pay.
The FAFSA is completed by the parent with whom the students spends the most overnights in the 365 days before completing it. It may be the custodial parent (according to the divorce degree), it may be the other parent.