How Does a Parent Enrolling in College Affect the Child's Financial Aid?
May 09, 2011
My daughter is hoping to attend a private college next year. Of course, we will be applying for financial aid and as many scholarships as we can find! My husband works full time and I have always worked full time. In late February, I was temporarily laid off from my job. I should be returning to work on a part-time basis in June. I am contemplating going back to school, but would have to apply for financial aid for myself as well. Would applying for financial aid for myself now hurt the amount my daughter would get when she applies next year? I don’t want to hurt her chances of getting aid by going to school myself. — Laura K.
When a parent applies for financial aid for her own education, it generally does not hurt her child’s financial aid eligibility and may even help both parent and child to qualify for more student financial aid.
The financial aid the parent receives is not counted as part of total income on the child’s current or subsequent FAFSA. The FAFSA includes several questions designed to identify financial aid that may have been included in taxable income so it can be excluded from adjusted gross income in the calculation of total income.
The main question is whether the child can be included in the number in college figure on the parent’s FAFSA and whether the parent can be included in the number in college figure on the child’s FAFSA. Increasing the number in college can significantly increase eligibility for federal student aid.
If the child is a dependent student she will be counted in the family size on the parent’s FAFSA. (The answer to the next question in this Ask Kantro column discusses what happens when the child is an independent student.) Since she is included in family size on the parent’s FAFSA, she can also be included in the number in college on the parent’s FAFSA if she is or will be enrolled in an eligible college on at least a half-time basis in a degree or certificate program during the award year.
Whether the parent can be included in the number in college on the child’s FAFSA is more complicated. The Higher Education Amendments of 1998 (P.L. 105-244) modified section 475(b)(3) of the Higher Education Act of 1965 [20 USC 1087oo(b)(3)] to exclude the student’s parents from the number in college, effective starting with the 2000-01 award year. Before this change parents could be counted in the number in college on a child’s FAFSA. This change was enacted because the previous rules were prone to fraud, where parents would enroll in a local college just to increase their child’s eligibility for federal student aid, usually without attending classes or intending to obtain a degree. To address this problem, Congress switched the number of parents enrolled in college to a professional judgment item, by amending section 479A(a) of the Higher Education Act of 1965 [20 USC 1087tt(a)] to include “the number of parents enrolled at least half-time in a degree, certificate, or other program leading to a recognized educational credential at an institution with a program participation agreement under section 1094 of this title” in a list of examples of special circumstances eligible for an adjustment. This made the inclusion of parents in the number in college on a child’s FAFSA subject to the discretion of the college financial aid administrator. College financial aid administrators are in a better position to judge whether the parent’s enrollment in college is genuine or not.
If a parent is enrolled in college at the same time as her child, she should ask the college’s financial aid administrator for a professional judgment review to count the parent in the number in college figure on the child’s FAFSA. (If the parent is quitting her job to go back to school full time, she should also ask for an adjustment to income corresponding to the anticipated reduction in family income.) Most college financial aid administrators will want to see clear proof of enrollment on at least a half-time basis, including paid bursar bills and in some cases grade reports, before making an adjustment to the child’s FAFSA. They usually verify this information with the other college. If there are any signs that the parent isn’t genuinely seeking a degree they will disallow the adjustment. If the college financial aid administrator allows an adjustment, most will increase the number in college while some will decrease the parent income by the amount of the parent’s college costs. Either of these changes will improve the child’s eligibility for need-based financial aid.