Paule, Camazine & Blumenthal, P.C. posted in Divorce on Wednesday, February 04, 2015.
By Paule, Camazine & Blumenthal, P.C.
As a new year begins, resolutions and diets are not the only thing on the minds of those with children in their senior year of high school. Each January 1, the United States Department of Education begins accepting the Free Application for Federal Student Aid (“FAFSA”) for the upcoming academic year. FAFSA forms are accepted for federal aid until June 30, 2015, but in Missouri, FAFSAs must be received by April 1, 2015 in order to qualify for state aid for the 2015-2016 school year. FAFSAs can be confusing and daunting, so here are a few clarifications and tips.
Determining whether a student is dependent or independent is an important initial step in completing a FAFSA. The Department of Education has a variety of criteria to help you determine this, but in most circumstances, a high school senior will be a dependent unless (s)he is married, has a child for whom (s)he provides most of the financial support, or is in the military. (There are additional criteria not included here.) For dependent students, information about their parents will be required when filing a FAFSA, regardless of whether the parents intend to help the student pay for higher education.
For separated and divorced parents, there is an additional wrinkle: which parent’s information must be reported? Again the Department of Education provides guidance and tells the student to report the information of the “custodial parent,” or the parent the student lived with more during the prior year. Where the student spends equal time with each parent, they are to report the information of the parent who provided them more financial support.
For students whose custodial parent has remarried, both the income of the custodial parent and the stepparent must be reported. Thus, if you are a divorced parent with your child spending more than 50% of the time with you, and you are remarried, you must include the adjusted gross income of both you and your current spouse, even if you file separate tax returns.
For anyone getting divorced or contemplating remarriage, particularly those with children in high school, it is necessary to consider your children’s academic and financial future and plan accordingly. The Department of Education looks only at its formula and not at your parenting plan in determining who is the “custodial parent.”. An attorney can help you understand the FAFSA, and how to structure your settlement to give your children the best opportunity to obtain financial aid in the event you are not fully funding their higher education.