How divorce affects financial aid

On behalf of The Walters Law Group, Ltd. posted in Child Custody on Tuesday, October 1, 2013.

Illinois residents might be confused about how divorce affects financial aid. Some parents might not know which parent should file the Free Application for Financial Aid, which is required for their children to get federal financial aid. The rules for seeking financial aid are different for children of divorced parents than it is for those of married parents.

First of all, who the child lives with matters. The parent who fills out the FAFSA should be the one that that has had primary child custody of the child for the majority of the year. For example, if a child lives with his or her mother for most of the year, then the mother would list her income on the FAFSA, and the father’s income would be irrelevant since the mother would be considered the primary provider for the child.

It does not matter who claims the child on his or her income tax return. The parent that the child lives with for most of the year is still the one that lists his or her income on the FAFSA, even if the other parent claimed the child on his or her income tax return. Also, if the parent that the child lives with most of the time remarries, then the child’s financial aid can be affected since the new spouse’s income must be reported on the FAFSA as well.

Also, when parents are determining who the child lived with the most for FAFSA purposes, they should ensure that they get the time period correct. The FAFSA calendar year begins on the date that the FAFSA is signed, so if parents and children sign the FAFSA on Jan. 30, the FAFSA 12-month period would begin on that date.

Family law attorneys might be able to help parents determine issues such as child custody and child support. They might also help them negotiate other family law issues such as alimony and division of property when going through their divorces.

Source: CBS, “How does divorce affect college financial aid?“, Lynn O’Shaughnessy, September 27, 2013