Paying For College When Parents Are Divorced

The headlines about college tuition are sobering indeed. The National Center for Education Statistics reports that for 2011–12, annual undergraduate tuition, room, and board costs were estimated to be $14,300 at public institutions, $23,300 at private, for-profit institutions, and  $37,800 at private nonprofit institutions and of course, at many of the most selective schools, tuition alone is now well over $40,000. Keep in mind that none of those figures include living expenses, books and supplies, transportation, insurance, and incidentals. What’s more, college tuition costs are rising faster than the rate of inflation!

It’s no wonder that for many of us, paying for college is one of the most daunting financial challenges we will ever face. (For a broader discussion about college costs, please see my earlier article, Who Pays for College Tuition?)

Many families manage the challenge with help in the form of financial aid for higher education. If you’re the mother of a prospective or current college student, chances are you’ve already navigated a complex maze of application requirements, starting with the Free Application for Federal Student Aid (FAFSA). Every year, households across the nation sit down together to begin this important process.

What happens, though, if you and your child’s father are divorced, or divorcing?

While you might be overjoyed not to be married to your ex any longer, sometimes it seems that divorce throws a wrench in the works of every aspect of your life, especially where parenting and finances are concerned. College financial aid is one of those areas that can be complicated by divorce. However, any wrinkles can be ironed out — provided you understand the FAFSA process.

Here are some key points for divorcing and divorced mothers to know, when filing for financial aid for their college students:

The custodial parent files the FAFSA.
Regardless of which parent claims the child as a dependent on their tax return, the parent with whom the child spends most of his/her time is the one who must complete the FAFSA form.

The time period of interest is the 12-month period ending on the date the FAFSA is completed. If the FAFSA is to be filed in April 2015, the custodial parent is the one with whom the child has lived with for the most time between April 2014 and April 2015. If the child has spent an equal number of days with each parent during those 12 months, then the parent who has spent more money on the child’s care is the one who should complete the FAFSA.

The custodial parent’s income is the one that matters for federal aid eligibility.
Filing the form isn’t simply being the parent who clicks “send.” The FAFSA contains many detailed questions about a student’s family’s income and assets. The responses are entered into a formula that determines the Expected Family Contribution – in short, how much money you will be expected to come up with toward your child’s college expenses.

If you are the custodial parent, it’s your income and assets that go on the form. Suppose, for example, that your ex-husband earns $500,000 a year in his business, and you make a tenth that much working part time from home. Your child would likely be eligible for more financial aid, with his/her eligibility determined based on your income alone.

If you remarry, your new husband’s income will get factored in.
If the custodial parent remarries, the new spouse’s income and assets have to be listed on the FAFSA. While it may not seem fair, that can lower your child’s eligibility for financial aid.

There are sources of non-federal financial aid, as well.
In addition to the FAFSA, many private colleges require that financial aid applicants submit the College Scholarship Service Profile (CSS PROFILE) form to determine eligibility for non-federal financial aid. The CSS PROFILE is an instrument of the College Board, not the federal government.

Many (but not all!) of the PROFILE participating schools require financial information from the non-custodial parent as well, and use it to calculate how much you will be expected to pay.

If either or both parents have remarried, some of these schools also consider the new spouses’ incomes to be fair game. Some schools weigh how much of which step-parent’s income to consider based on factors such as how long it’s been since the student’s parents divorced. It gets complicated quickly, and if you and/or your ex have remarried, you should definitely contact each school’s financial aid office to discuss the specifics.

Communication is key.
Financial aid applications can be complicated, stressful, and time consuming. Good communication cuts down on all of that. You should be communicating well with prospective college choices, and also, if possible, with your ex-husband.

Effective communication with your ex can be a tremendous help in this whole process. If the two of you have a cordial relationship in which information can be exchanged honestly and freely, you’ll be able to collaborate on the college selection process and optimize your use of financial aid. If that’s not the case, though, you likely already know it — and all you can do is hold up your end as best you can.

Where the colleges are concerned, you should never hesitate to make direct phone calls to individual schools to get clarification of their specific requirements for financial aid eligibility — and be sure to check for any school-specific deadlines you may not otherwise be aware of. Make these calls early in the college selection process, to avoid your prospective student getting their heart set on a school that won’t make the best financial sense. If you can narrow the college search down to schools that will work with you on a financial aid package, or those that don’t consider income from a non-custodial parent, it’s likely you’ll avoid disappointment down the road.

Jeffrey Landers is a member of the DailyWorth Connect program. Read more about the program here.