One of the biggest financial concerns for many Maryland parents is how they're going to pay for their kids' college education. Many rely on federal student aid. This requires completing the Free Application for Federal Student Aid. When parents are separated or divorced, there are things they need to know when completing the FAFSA.
In most cases, only the custodial parent's income is considered and listed on the FAFSA. If one parent isn't legally considered the custodial parent, for purposes of the FAFSA, it is the one who contributed more to the financial support of the student in the year prior to the filing of the application.
If the custodial parent has the lower income of the two, obviously the student may qualify for more financial aid. Colleges and universities can request child custody and divorce documents for verification.
Some parents may decide to change the legal custody arrangement. However, financial aid administrators may investigate the true custody arrangement if they don't feel that the parents are being honest. Obviously, any custody changes should take into consideration what's in the best interests of the child.
Many parents have remarried by the time their kids go off to college. The assets and income of the custodial parent's spouse are considered when financial aid is determined. This generally increases the overall household income and therefore, can decrease the amount of financial aid. However, if the student's stepparent is providing over half of the support for other children, they are considered in the size of the household, even if they are living elsewhere. This can be an advantage when seeking financial aid.
If you and your spouse decide to make custody changes in advance of your child going to college or if you have college payment issues that need to be worked out, it's wise to seek the guidance of your family law attorney. If you're going through a divorce and college is still some years down the road for your children, you should consult with your attorney on how best to plan for the college years.
Source: Forbes, "College Financial Aid Advice For Divorced Families," Emma Johnson, Sep. 09, 2015