Though the FAFSA might be a little more complicated when you have divorced or never-married parents, your family situation shouldn't hold you back from receiving as much student aid as possible.
Here, we'll walk you through some basic tips that to make completing your FAFSA a little easier no matter what your family situation is.
1. Know who to define as a "parent"
The FAFSA uses information about your family's financial situation to determine your financial aid eligibility. That means you'll need income information from your parents — but the people you consider your parents may not be the same ones that count on the FAFSA.
That's important, because the information you enter will be used to determined yourexpected family contribution or EFC. This is a formula that takes into account your family's tax information, untaxed income, assets, and benefits. The EFC also considers the size of your family and the number of other kids in your family attending college during the year.
If your parents aren’t divorced, fill out the FAFSA with details from both of them. If they are divorced, things start to get a little trickier, as only one parent is considered a parent for FAFSA purposes in this situation.
If your parents live together, even if they are separated, were never married, or are divorced, you file the FAFSA with income information from both of them. If your parents are divorced, separated, or were never married and don't live together, you fill out the FAFSA based on your custodial parent. That’s the parent you physically live with more than the other. Note that having "legal custody" does not automatically equal custodial-parent status. Rather, it's a question of where you spend the most time and which parent provides the most financial support.
If you live with both parents equally, you fill out the FAFSA based on the parent who gave you more financial support in the last year.
What about stepparents and unmarried significant others?
If your parents don’t live together and your custodial parent (or your parent who supported you financially) has gotten remarried, you do need to report your stepparent's information on the FAFSA. And in that case, you do not report income information from your noncustodial or non-financially supportive parent.
If your custodial parent simply lives with a new significant other and is not legally married, you only need to report your legal guardian's income information. However, if the significant other is helping with rent or utilities, those contributions must be listed as nontaxable income.
What about common-law spouses?
Of course, the wrench in that situation is common-law marriage. If your parent and their significant other have been together for a certain amount of time and basically live as if they’re married, your state may recognize them as so. If common law marriage applies to your family, you do count the custodial parent's significant other as a stepparent.
What if you live with someone other than a parent?
If you live with someone other than your parents, you still report your parent’s information on FAFSA, unless the person you live with has legally adopted you.
Remember that you don't need to include the financial information of every adult in your life. If you do, you're over-reporting income and it could cause you to lose out on financial aid.
Focus your application on the custodial parent and you’ll be fine. Noncustodial parents may be required to provide information later to some private schools when aid is being awarded, but there's no need to overreach with FAFSA.
Also, be aware that alimonyis considered taxable income and should already be included in the custodial parent’s tax information. Don’t report it separately, like you do with child support, which is untaxed. Doing so means you’re again over-reporting income and it may reduce what’s offered in your financial package.
4. Know how to work the situation for more aid
There are a few ways to use divorced, separated, or unmarried parental marital status to your financial aid advantage. One is by ensuring that your custodial parent is the one who makes less money. By living with the parent who earns less, you EFC will be lower and your aid package could be higher. But, don’t falsely report who you live with based on income — that’s fraud.
Divorce settlement agreements can (and should) include the written details of a college support plan. In this case, parents decide the percentage of college costs each person is responsible for and what expenses will be covered by each parent. With these agreements in place, the custodial parent still fills out the FAFSA, but there’s a plan in place for actually covering the EFC so that it doesn't fall solely on one parent’s shoulders.
Hopefully, these tips help you fill out the FAFSA if your family situation isn’t “traditional.” Remember, financial aid advisors at colleges are experts in these FAFSA rules. When in doubt, ask them for help.
Carol Katarsky is a contributing writer for Nitro. She is an award-winning journalist with extensive experience writing about both finance and education. Her corporate and non-profit clients include AIG, Children's Hospital of Philadelphia, and the Project Management Institute. She lives in Philadelphia with her husband, son, and one cat more than she should. Read more by Carol Katarsky