If you’re a college-bound student applying or returning to school this fall, you need to complete the FAFSA. Normally, it’s available starting October 1, but this year, the opening date has been moved to December due to big changes being made to improve the form. The FAFSA Simplification Act cuts the application down so there are fewer questions for parents, but if you’re a teen with separated or divorced parents, some aspects make it more difficult to determine which parent should complete the form. Here are the answers to some questions you may be asking.
Who is your parent according to the FAFSA form?
In the past, the “custodial parent” was determined by who you lived with most consistently. But on the updated FAFSA, the definition of that term will be different. According to StudentAid.gov, these guidelines will help you when completing the FAFSA:
- If your biological and/or adoptive parents are married to each other, you answer the questions about both of them.
- If your legal parent is widowed or was never married, answer the questions about just that parent.
- If your parents were never married or are now separated or divorced, only provide information for the parent who provides the most financial support.
- If, however, your non-married parents still live together in the same household, both parents will be required to submit their information regardless of marital status.
In the past, the parent with custody (or who you lived with) would file and report their income and assets on the FAFSA. According to the new FAFSA rules, the parent who provides the most financial support in the relevant tax year should complete the FAFSA instead of just the parent who has custody. In the case of equal financial support, the tie is broken based on whichever parent has the higher adjusted gross income. For purposes of completing the FAFSA, the following criteria no longer apply:
- Which parent the student lives with the most
- Which parent has legal custody
- Which parent claims the student on their taxes
Additional questions you may need answers to
The situations discussed above are just the most common for students with separated or divorced parents. Here are some quick answers to questions for students in more specific scenarios:
- What if my parent is remarried? A custodial parent who is remarried should report income and asset information for both themselves and their spouse. This is true even if the new spouse has not adopted the student. The FAFSA requires the entire household’s financial information for financial aid consideration.
- What if my stepparent is widowed? If your stepparent was married to your biological/adoptive parent but is now widowed, that stepparent doesn’t count as a parent on your FAFSA unless they have legally adopted you prior to completing the application.
- What if I live with someone other than my parents? It doesn’t matter if you don’t live with your parent(s)—you still must report information about them. The following people are not considered your parents unless they have legally adopted you: grandparents, foster parents, legal guardians, older siblings, uncles or aunts, and widowed stepparents.
- How will these changes affect my financial aid? Unfortunately, these changes have the potential to decrease the amount of financial aid available to children of divorced or separated parents.
Other big changes coming to the FAFSA
Here’s a quick summary of the other upcoming FAFSA changes pertaining to all families:
- The Expected Family Contribution (EFC) will be replaced with the Student Aid Index (SAI) for need-based program calculations.
- Income information will be directly transferred from the IRS to align the FAFSA with tax return data, making it an easier, automatic process.
- Family size will be calculated based on the number of dependents listed on a parent’s tax return.
- Child support will be reported as an asset, not income.
These changes could put a hardship on families with separated or divorced parents by increasing the amount you may have to pay as calculated for your Student Aid Index. Be sure to do your due diligence to arm yourself with FAFSA knowledge before you complete the forms so you can make an informed decision once your financial aid offers come in the mail.
Confused by some of the terms in this blog? Check out All the Important Financial Aid Terms You Need to Know right here!