White Picket College

Divorce is hard enough.

Splitting the kids, the assets, the house.  Everything.  All of a sudden your once solidly, secure life is split in half.  The same goes for a child’s education.

Sadly, but true enough, organizations like FinAid report a plethora of letters from kids who are the victims of a horrible child custody battle…and so are their college saving accounts.  One parent refuses to pay for school.  The other parent refuses to fill out the FAFSA.

It’s an epic battle in the making.

When divorce happens, the child may be young.  College tuition and fees are those blips on the far radar, almost off the screen, years down the line.

When the time comes for the child to start applying to colleges, it’s time to realize who’s paying.  Before getting into an argument, let’s review the facts behind divorced parents and college financial aid.

As of 2010, usually one parent must fill out the FAFSA and other need analysis forms for most private colleges.  This person is called the “custodial parent.”  The custodial parent is whom the student lives with most during the year prior to completing the FAFSA.  S/he does not have to be the parent initially awarded custody in original divorce agreement.

The situation becomes very expensive for a divorced upper middle class (UMC) family when either situation occurs:

• The custodial parent makes $100,000 or more
• Or the child has a stepparent that is financially well-off.

When the custodial parent makes $100,000 or more, that is the UMC minimum household income figure.  To the federal government, on paper, it signifies you have money to spend, thus your chances for financial aid plummet.

The situation worsens if the child has a stepparent who contributes to the household.  So let’s say the custodial parent’s income is $110,000 a year and the stepparent’s income is $85,000 — this $195,000 all goes into the FAFSA.  Why?  Because the federal government distributes aid based on household.

On the other hand, if the student lives with a custodial parent, stepparent and let’s say two step siblings, the expected family contribution, or how much money the family can spend on college according to the federal government, will decrease.  Thus, increasing the student’s chances for a better financial aid package.

If any parent thinks that not filling out the FAFSA will increase the student’s chances for more financial aid, that’s a bad idea.  In fact, it will lessen your child’s chances in receiving aid.  This strategy does NOT work.  As FinAid says:

“Some parents mistakenly believe that if they refuse to contribute, the school will declare the student independent and pick up the parent’s share of the college costs.”

WRONG.

To declare a student independent is EXTREMELY difficult.  (Take a look at our article Emancipate A Minor to Pay for School, which better explains.)

Schools and the federal government know all the ins and outs, tricks and shenanigans.  To try and fool them will only be hurting your child’s chances of receiving educational financial aid.

Also, pre-nupitial agreements and divorce agreements don’t mean a thing to colleges and the federal government.  At least one parent has to have FAFSA eligibility.

Either way, cooperate and play nice because if you don’t, your child is the one whose going to end up hurt . . . financially and emotionally.

~ Please read: My Ex Refuses to Pay & Stepparents & the FAFSA

© White Picket College, 2010 – College Funding for the Upper Middle Class