<p>I don't really have a specific question, but I'm just really anxious about the whole financial aid thing because of my situation. My parents are divorced and have joint physical custody of me. I live with them each equal amounts of time, although my dad pays child support to my mom. My mom is self employed (sole proprietorship with no employees) and does freelance work under her company name for multiple companies. My dad works a regular salary job. This is what I know: my dad makes more money than my mom. They both make over $50,000 a year. Neither of them have large assets besides their cars, bank accounts, retirement funds, and some stock. My 529 account is in my dad's name. We haven't had an in-depth discussion that's why my figures are so vague. I attended a financial aid informational night put on by my state financial aid agency, and it left me with more questions and stress than I had before. My dad explained the custody situation to the financial aid counselor, and he said only one parent needs to fill out the FAFSA, even though both have joint custody and both provide for me financially. This was so incomprehensible to me. Is this true? With this amount of information can someone please help me, I don't even know where to begin I have so many questions.</p>
<p>This is true for schools that only use the FAFSA which are primarily state schools. For most private schools, and all private schools that meet financial need, both parents’ financials will be looked at as will any new spouse’s.</p>
<p>c571,
If you are applying to FAFSA only schools, and your parents have a substantially different income than the other one, you could do the following.</p>
<p>A friend of ours was in a similar situation. My understanding is that the first rule is whoever you stay with the most days - even just 1 more day than the other, is the one who’s info that you use. So even if your parents have true 50/50 custody, chances are you stay with one more than the other depending on how the weeks fall. Just stay with the one with less income a few extra nights, maybe one extra night every other month or just an extra week staight. Remember that FAFSA wants to know this info for the ‘last’ year as of when you are filling it out, so think ahead. This way you can fill out the forms with no guilt of ‘just picking the parent with less income’ so to speak.</p>
<p>I know people in your situation where one parent made 30K and the other 100K+, and it can make a HUGE difference. Finaid.org has good calculators to figure out what the difference would be.</p>
<p>DJD</p>
<br>
<br>
<p>Frankly, the above situation is why the FAFSA system is stupid.</p>
<p>But…back to the OP…you need to find out what your family’s EFC will be so you can make some intelligent decisions. If your 529 is in your dad’s name, then I don’t know if FAFSA will expect the form to use the dad’s info. But, you’ll have to ask to be sure.</p>
<p>Either way…you need to know what your EFC is and how much your parents can pay. Then proceed.</p>
<p>Use this EFC calculator to get an estimate of your EFC [FinAid</a> | Calculators | Expected Family Contribution (EFC) and Financial Aid](<a href=“http://www.finaid.org/calculators/finaidestimate.phtml]FinAid”>http://www.finaid.org/calculators/finaidestimate.phtml)</p>
<p>No, 529 being in dad’s name doesn’t affect which parent is used for FAFSA purposes. The bottom line is that the rule for divorced parents is that the student uses the income for the one with whom he/she lived THE MOST (even a day longer, as mentioned previously) within the previous 12 months. That’s the way it works, so use that info to your advantage.</p>
<p>For most FAFSA only schools, cars & retirement accounts never come into play. You don’t report these on FAFSA. Some schools may have their own forms for institutional aid & they may ask for this type of info - I don’t know of any non-Profile schools that do ask for this info (and not all Profile schools ask about cars) - but there may be some that do. FAFSA is going to ask for income from work, AGI, taxes paid, family size, number in college, cash & investments that are not tied into formal retirement accounts, and information about certain tax-deferred payments (like pretax money voluntarily put in retirement accounts during the year). There are a few more things reported on FAFSA, but those are the ones that affect most people.</p>
<br>
<br>
<p>OK…dumb question…how does anyone really prove that either way (especially this “one day more” rule…) It seems like it depends on the family’s honesty. </p>
<p>I really can’t imagine any family saying…well, DS stayed at my home 1 day more, so my higher income counts. Just ain’t gonna happen.</p>
<p>And, the temptation would be so great to lie, since who could really prove them wrong? So many ex-wives earn a lot less than the ex-husbands…it just seems like a recipe for fraud. That’s why both incomes should count = always.</p>
<p>To the OP – the amount that your dad pays your mom for child support would be subtracted from his income on the FAFSA and added to hers – so the income differential might not be as much as you think.</p>
<p>So, if child stays mostly with mom, then mom’s income plus child support is “the income”. However, in this case, the dad has a 529 account. So, does that mean that money in the 529 account doesn’t get figured in anywhere?</p>
<p>If that is the case, then it would seem “smart” for some divorced parents to stop paying child support the year before college and have the non-custodial parent put that money in some kind of account for college - as long as both sides agree. Now, that I think about it, I think I know someone who did that …but I don’t know if that was the reason they did this. (to minimize mom’s income and to have savings set aside for college that wouldn’t get counted on a FAFSA). Too many loopholes.</p>
<p>mom2collegekids, the fallacy of your reasoning is that you are assuming (incorrectly), that all students get cash-based financial aid (grants) to meet their need as reflected in the FAFSA. If the difference between a FAFSA EFC of $10K vs. $15K meant that the student would always get an additional benefit of $5K, then it might make sense to try to manipulate the system by income shifting. </p>
<p>However, that’s not how its work. Public schools, which rely on the FAFSA, rarely meet full need, and most colleges provide packages that include loans and work-study. So a lower FAFSA EFC generally means more loans. Although designated as financial aid, loans always cost MORE out of pocket, over the long term, than cash – that is, a subsidized Stafford loan of $5500 will typically cost about $7600 over the life of the loan.</p>
<p>Most recipients of child support payments need that money to make ends meet, and it would make no sense for a mother to forego $12,000 in the year 2009 in the hopes that her child may *qualify" for $5000 more in federal aid in the year 2010, when that “aid” is likely to be in the source of loans. The mom would be better off to open her own 529 account and deposit some of the child support money into it, in order to have a ready source of cash when needed. </p>
<p>The one area where it might make a difference would be if the child qualifies for a federal Pell grant – because that’s basically an entitlement system (if the kid qualifies for the grant, they will get whatever they qualify for) – but the OP said both parents make over $50K – so clearly s/he would not qualify for a Pell grant in any case.</p>