Which Parents are Responsible for Completing the Financial Aid Application Forms?

Which Parents are Responsible for Completing the Financial Aid Application Forms?

Both of my daughters’ parents have re-married. Whose income is

counted for financial aid? Just biological parents or their spouses

too? Does primary parent fill out the paperwork or the parent with the

lowest (or highest) income?

— M.J.

When a student’s biological/adoptive parents are divorced, only one of

the two parents is responsible for completing the Free Application for

Federal Student Aid (FAFSA). Both may be required to complete the

CSS/Financial Aid PROFILE form, a form used by about 250 mostly

private colleges.

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The parent who is responsible for completing the FAFSA is often

referred to as the custodial parent. This is not necessarily

the same as the parent who has legal custody of the

student. The custodial parent is the parent with whom the student

lived the most during the 12 months ending on the FAFSA application

date.

It is possible that the student lived with neither parent more than

the other. This is rare, since there are an odd number of days in the

year. However, it can happen during a leap year or a recent divorce,

especially if the parents share joint custody. It can also happen when

the student is living with neither parent. For example, the student might

be living with a relative other than the parents or the student might be

living at school for the entire year.

If the student lived with neither parent more, the custodial parent is

the parent who provided more support to the student during the

12-month period ending on the FAFSA application date (or the most

recent calendar year during which support was received if that does

not distinguish the parents). Multiple support agreements, in which

the parents trade off who claims the student as an exemption on their

federal income tax returns, are irrelevant since the definition of

support in the Higher Education Act of 1965 differs from the

definition used by the Internal Revenue Code of 1986.

If neither parent provided more support, the family should consult

with the financial aid administrator at the college before filing the

FAFSA. In most cases the financial aid administrator will require the

parent with the greater income to complete the FAFSA.

Divorced parents may have some flexibility in determining the

custodial parent by controlling the student’s living

arrangements. Generally, need-based financial aid will be greater if

the custodial parent is the parent with the lower income. However,

college financial aid administrators will question the arrangement if

the student attended secondary school in a school district that does

not match the custodial parent’s address. The college financial aid

administrator may ask for a copy of the divorce decree or separation

agreement to resolve the conflicting information. So it is generally a

good idea to seek a court modification to the custody agreement

corresponding to the actual living arrangements.

If the parent responsible for completing the FAFSA has remarried, then

the step-parent’s financial information must also be reported on the

FAFSA. Prenuptial agreements are irrelevant, as the requirement to

include step-parent information is established by federal law (section

475(f)(3) of the Higher Education Act of 1965).

Approximately 250 colleges require families to file a supplemental

form called the CSS Financial Aid PROFILE in addition to the

FAFSA. The PROFILE is used to apply for financial aid from the

college’s own funds. The rules for determining the parent responsible

for completing the PROFILE are similar to the rules for the

FAFSA. However, the non-custodial parent is require to complete a

Non-Custodial Parent CSS PROFILE form (NCP). Potentially all four

parents could be required to supply financial information on the

PROFILE and Non-Custodial PROFILE forms, if both biological/adoptive

parents have remarried.

Sometimes divorced parents are unwilling to complete the Non-Custodial

PROFILE form or even the FAFSA because they fear that their ex-spouse

will be able to see their income and asset information. The Family

Educational Rights and Privacy Act (FERPA) prohibits revealing parent

financial information to the student. Colleges also cannot reveal

parent financial information to anybody other than the parent who

provided the information.

Source: Fastweb

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