Divorce and its impact on financial aid for college-aged children

March 26, 2014 (Press-News.org) Divorce and its impact on financial aid for college-aged children

Article provided by Shimalla, Wechsler, Lepp & D'Onofrio, LLP
Visit us at http://www.cswlawnj.com

After divorce, many parents in Somerset County face a number of financial challenges. Not only must they now support a household on one income, but if they have children who they expect will go to college, they may be concerned about how they will support themselves, their families and help their children pay college expenses. It may surprise you to learn that children of divorced parents may have an advantage over two-parent homes when it comes to paying for college.

What is FAFSA?

The Free Application for Federal Student Aid is the central component of the loan application process for college students. This application determines whether or not a student is eligible for loans and for government and institutional aid programs. Each student's application must include basic information about the student, and about his or her parent's income, assets, taxes paid and other financial criteria. Once this information is collected, the Expected Family Contribution calculator analyzes how much aid a student is eligible for based on how much the educational costs will be and how much the parents are able to contribute to those costs.

Filling out the FAFSA

Depending on the child's situation, having divorced parents can either harm their chances for financial aid or help them. When filling out the FAFSA, parents should remember that:
-The parent the child lives with most of the time should be the one who completes the application. On the FAFSA, the parent's income where the child lives the majority of the time should be the only income listed.
-Who the child lived with the most is determined by which parent the child lived with the majority of the time during the 12-month period prior to signing the FAFSA.
-If a parent is remarried, that parent's eligibility for financial aid can be affected.
-Some colleges will require the non-custodial parent to fill out the Noncustodial PROFILE document.
-Which parent claims the student as a dependent on their tax-returns is irrelevant.

If, by chance, the student divides up the time they live with each parent equally, the parent that spent the most money on their care the following year should complete the FAFSA.

Students living with the parent who earns less income may be able to obtain more financial benefits as a result of that parent completing the FAFSA than if they lived with the parent who earns more.

If you and your spouse are considering divorce and you are worried about the financial implications it will have for both you and your children, consult with an attorney in your area who will work to protect your best interests and help plan for your children's, and your own, futures.