How should divorced parents handle college financial aid forms?

Regardless of whether you are currently considering a divorce or have been divorced for years, your split will affect your child’s financial aid forms for college. No matter what your child custody arrangements consist of, it is important to understand how you and your spouse’s split will affect this process.

The financial aid application process tends to differ somewhat when parents fill out college-specific aid forms and when they fill out a Free Application for Federal Student Aid (FAFSA). However, there are usually a few straightforward rules that apply to applications for both.

The government and colleges generally are more concerned about whom the child lives with, not necessarily who claims the child on income tax returns. If the child lives with one parent for a greater portion of the year, that is the parent whose income will need to be reported for the purposes of financial aid. If that parent has remarried, his or her spouse will likely have to report his or her earnings as well.

It is worth noting that neither the federal government nor colleges generally have any way of verifying where the child primarily lives. However, they do expect that the parent who provides housing for the child most of the time will fill out financial aid applications. Most of the time, the other divorced parent will not need to report his or her earnings to either the government or the child’s college of choice. If the child attends a private college and is asked to fill out a PROFILE aid form, both parents will likely need to report their earnings.

Source: CBS Money Watch, “How does divorce affect college financial aid?” Lynn O’Shaughnessy, Sep. 27, 2013