Five College Financial Aid Tips for Divorced Parents

If you’re a parent, you’ll likely set your expectations high when it comes to education for your children, especially college. The hours and expenses can add up while applying to schools, scheduling visits and obtaining recommendations. It can be overwhelming in divorce situations to determine which parent will cover the costs and how to budget.

But the search and application process is only part of it. The financial aid process can be very complicated in divorced or separated parent situations. What if you find out late in the process your child doesn’t qualify for financial aid and has to wait another year to start college? This scenario is not that uncommon. With divorce rates increasing, more and more families are navigating the ins and outs of college financial planning for their kids.

The Free Application for Federal Student Aid (FAFSA) rules are different for divorce, separation and remarriage. There are important rules that can be overlooked and potentially prevent you from qualifying for financial aid or getting the amount you need and deserve for your child. Here are five FAFSA tips to help with college planning:

Understand who the “custodial parent” is. The custodial parent is the parent with whom the child has lived for most of the year before the FAFSA filing. The number of days can be counted, but if the total is uncertain based on the recent divorce, a leap year or other reason, the next step is calculating which parent provided more financial support to the student during the year before the FAFSA filing.

Know the details of the divorce. There are several pieces of information from the divorce that the FAFSA will require, such as the date of the divorce, the amount of child support paid or received, and even possibly the actual agreement.

Stepparents income can affect financial aid. If the parent that the student is living with is remarried, the stepparent must report their income and assets, even if the parent and stepparent got married under a year ago.

There are ways to qualify for more aid. A student of divorced or separated parents may qualify for more financial aid if the student lives with the parent who makes the lowest income. Even a 51-49 percent split is enough to give a student a better chance of qualifying for the most financial aid.

Fill out the FAFSA as soon as possible. Some aid does get awarded on a first-come, first-served basis for federal grants, work study programs, student loans and some scholarships. It just makes sense to act as soon as you can.

Would you like to learn how to achieve your best financial future? Simply request a call from a Bayntree financial advisor today.

Bayntree Wealth Advisors, located in Phoenix and Scottsdale, Arizona, provides comprehensive financial planning and wealth management. The Bayntree team specializes in all aspects of financial health, including retirement planning, risk management, investment advice, tax strategies, estate planning and insurance.

Bayntree does not provide specific legal or tax advice. Please consult with your tax advisor or legal professional for guidance with your individual situation.