If you’re a college-bound student applying or returning to school this fall, the Free Application for Federal Student Aid (FAFSA) should be at the top of your to-do list. While the FAFSA traditionally opens on October 1 every year, the opening date was moved to December for the past couple of years to accommodate updates as part of the FAFSA Simplification Act.
The good news is that the original timeline for the form’s release should be back on track. In addition, the new FAFSA updates reduced the number of questions on the form, making it simpler to complete. However, for students with separated or divorced parents, determining which parent should fill out the FAFSA may now be more confusing. If this situation applies to you, here are some answers to questions you may have.
Who is your parent according to the FAFSA form?
In the past, the “custodial parent” was determined by who the student lived with most consistently. However, the updated FAFSA has introduced new guidelines. According to StudentAid.gov, here’s how to determine which parent’s information to include:
- If your biological and/or adoptive parents are married to each other, provide information for both parents.
- If your legal parent is widowed or was never married, provide information for 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 your non-married parents still live together in the same household, provide information for both parents, regardless of their 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 updated FAFSA rules, the parent who provides the most financial support during the relevant tax year is responsible for completing the FAFSA. In cases of equal financial support, the parent with the higher adjusted gross income (AGI) must complete the FAFSA.
Long story short, the following criteria no longer determine which parent completes the FAFSA:
- Which parent the student lives with the most
- Which parent has legal custody
- Which parent claims the student on their taxes
Related: Read more answers to your questions about Tackling the Financial Aid Process With Your Parents
Additional questions you may need answers to
The situations above are the most common for students with separated or divorced parents. Here are answers to some specific scenarios students with separated or divorced parents may encounter:
- What if my parent is remarried? If your custodial parent is remarried, include income and asset information for both your parent and their spouse. This is true even if the stepparent has not adopted you. The FAFSA requires financial details for the entire household.
- What if my stepparent is widowed? If your stepparent was married to your biological or adoptive parent but is now widowed, do not include their information unless they legally adopted you before you completed the FAFSA.
- What if I live with someone other than my parents? Regardless of where you live, you must report information about your legal parents. The following individuals are not considered parents unless they’ve legally adopted you:
- Grandparents
- Foster parents
- Legal guardians
- Older siblings
- Uncles or aunts
- Widowed stepparents
- How will these changes affect my financial aid? These changes may decrease the amount of financial aid available to students with divorced or separated parents, depending on the financial support provided by each parent. Under the new rules, the FAFSA may ask for more detailed financial information from both parents, or it could require a different parent to fill out the form, which might affect how the financial contribution is calculated. As a result, this could impact the overall amount of aid offered, particularly if one parent has a significantly lower income than the other.
Other big changes to the FAFSA
Here’s a quick summary of other FAFSA updates that affect all families:
- Expected Family Contribution (EFC) has been replaced by the Student Aid Index (SAI) for calculating eligibility for need-based aid. While the overall process remains similar, the shift to SAI may affect how aid is distributed and the amount a student is eligible to receive, especially in cases of significant financial changes.
- Income information is now directly transferred from the IRS to the FAFSA, streamlining the process. This update eliminates the need for manual data entry, reducing errors and making the application process faster and more accurate.
- Family size is now determined by the number of dependents listed on a parent’s tax return. This means that only those dependents who are financially supported by the parent are counted, which may impact a student's eligibility for aid.
- Child support is now reported as an asset rather than income. This change may affect the way financial need is calculated, as assets are treated differently than income when determining aid eligibility.
Related: Check out these 4 Tips for Families to Maximize College Affordability
These updates were made to simplify the FAFSA process, but they may create new challenges for families with separated or divorced parents by potentially increasing their calculated contribution. Being proactive in learning about these changes can help you make informed decisions when reviewing your financial aid offers.
Confused by some of the terms in this blog? Check out All the Important Financial Aid Terms You Need to Know for a helpful glossary!
