Filling out FAFSA Applications When Parents Are Divorced

The Free Application for Federal Student Aid (FAFSA) is the application used by all two and four-year colleges, universities, and career schools for awarding federal, state, and school-funded student aid. Anyone who has ever filled out a FAFSA form can likely attest to how overwhelming it may feel. Afterall, this is the document that will determine if and how much financial help your child will receive to help cover the costs of their education.

If the student’s parents are living together, the FAFSA application is filled out with details from both parents. This applies to parents who are married or parents who never married. As long as both parents live in the same home with the student, then both their incomes need to be reported.

The FAFSA application becomes slightly more difficult when the parents of the student are divorced. In these situations, the parent who the student lived with the majority of the time during the prior 12 months is the parent whose financial information should be provided on the application. If the student spent equal time with each parent, the parent that provided the most financial support over the past 12 months should be the one to complete the FAFSA.

Some other issues that you should keep in mind as you fill out the FAFSA application:

• • • While only one parent can claim the student on their income tax returns, it is not necessarily the same parent who will complete the FAFSA application. IRS rules and FAFSA rules are not the same.
    • If the custodial parent has remarried, then the stepparent’s income also needs to be included in the FAFSA application. However, if the custodial parent is only living with their significant other and they are not legally married, then only the parent’s income is reported.
    • Any alimony and child support that is received by the custodial parent must also be included on the FAFSA application.

What About Separations?

In most cases, separation of parents is treated the same as parents who are divorced. The separation can be an informal one in order to be recognized for federal student aid purposes. However, parents may not live under the same roof. They must reside in separate residences. While it is not necessary to have filed and been awarded a legal separation from the court, claims of a “recent” separation may send red flag warnings to the school your child will be using their financial aid at. Colleges and universities can legally hold back any federal student aid the student can receive if they feel there are discrepancies that need to be resolved. The school will likely request proof that the parents are maintaining separate households.

There are other situations that could also cause the school to suspect fraud. One of the major ones is when a student falsely identifies one parent as the custodial parent because their income and assets are less than the parent they actually live with. For example, the school’s financial aid office will likely question why the high school the student is coming from is in a different district than where the custodial parent lives in. If they suspect fraud, they may even request a copy of the parents’ divorce decree to verify custody and child support obligations.

If a school discovers evidence that the student and/or parents have committed fraud on their FAFSA application, they are required to turn the case over to Office of the Inspector General at the US Department of Education. Financial fraud convictions include prison for up to five years and/or fines up to $20,000 in fines. It should go without saying that the student will also lose any fraudulently obtained student aid funds.

Student Aid and Education Expenses

There are legal ways that parents can ensure their child receives the best federal student aid assistance possible. One way is by ensuring the custodial parent is the parent who makes the least amount of money. If your child currently lives with the parent who earns the most income, then consider having the child live with the parent with the less income at least a year prior to filling out the FAFSA to obtain a higher aid package.

An important factor to address long before your child begins applying to colleges should take place when you are going through divorce negotiations. Divorce and child support agreements should address the costs of college education and what each parent’s responsibility will be. Having these agreements in place can ensure that it will not be just one parent who will bear the burden of the children’s college tuition and expenses.

Contact Kirshenbaum Law Associates at 401-467-5300 for a confidential consultation.