Answers to Common Questions about Dependency Status and Financial Aid
By The Fastweb Team
August 31, 2017
Will my daughter’s chances for receiving financial aid be higher if we don’t claim her on our taxes? Household income is about $85,000 and she did not qualify for financial aid through the FAFSA. She is in a community college and is 20 years old. She recently moved out of our home but we are paying her college tuition. She has not received any scholarships. — Danielle V.
It does not matter whether you claim your daughter on your income tax returns or not; it will not affect her eligibility for federal student aid. The IRS and the US Department of Education use different definitions of dependency. The IRS definition is based on support. The US Department of Education definition is based on the student’s age, marital status and other qualitative factors. Unless your daughter gets married, has dependents other than a spouse or joins the military, she will continue to be considered a dependent student for federal student aid purposes until she becomes 24 years old.
Don’t forget to claim the Hope Scholarship tax credit (also known as the American Opportunity tax credit) on your federal income tax return based on amounts you paid for her tuition, fees and course materials.
I recently moved away from home. I’m working a part time job and am enrolled in college as a full time student. My mother is not really supporting me on going to school and our relationship isn’t good. I moved out of her home and receive no help from her or my father. I’m living with a friend now and pay rent. When I apply next year for financial aid do I file as dependent or independent? — Andrew A.
Ask the financial aid administrator at your college for a dependency override. Bring copies of letters from social workers, clergy and other people familiar with your situation.
Colleges cannot grant a dependency override merely because the parents refuse to contribute to the student’s college costs or to complete the FAFSA or verification. The student’s self-sufficiency also isn’t sufficient grounds for a dependency override.
But sometimes there are circumstances underlying the parental refusal to help that can support a request for dependency override. For example, colleges can grant a dependency override if there is a hostile or abusive family environment that would make it unsafe for the student to have further contact with his parents.
If a student doesn’t qualify for a dependency override, but the parents have cut off all financial support and refuse to complete the FAFSA, the most a college financial aid administrator can do is allow the student to borrow from the unsubsidized Stafford loan program.
I am currently a college freshman. I am 18 years of age and I moved out of my home in June. I currently pay rent among my other car, phone and living expenses. I rent a room from a family in my city, work 30 hours a week and have 5 classes on my schedule. Is there ANY financial aid or help I can get from anywhere? I’ve been told that its not possible and I find it rather upsetting that a self-supporting 18 year old student cannot get financial aid when they need it most, considering their other financial responsibilities. — Madison B.
A student’s financial self-sufficiency is not enough for the student to qualify for a dependency override. Until you reach age 24, you are considered to be a dependent student and your parents must complete the FAFSA. If you have a good relationship with your parents, ask them to complete the FAFSA. Tell them that it does not obligate them to pay for your college education, but will enable you to get financial aid such as student loans and grants.
I lost my job about one year ago. I live in my parents house with my fiance and two kids. My fiance works full time and I am collecting unemployment. My parents both work full-time but are not financially responsible for me. Does the fact that my family and I live with my parents affect the amount of FAFSA received? And also does my fiance’s pay affect my FAFSA as well? — Carolina V.
The word “fiance” is used when a couple is unmarried. This is in contrast with the words “spouse”, “husband” and “wife”, which indicate that the couple is married.
If you were married, you would be automatically independent and your living arrangement would not affect your eligibility for federal student aid. Likewise, if you are over age 24 you will be considered to be an independent student.
Assuming that neither is the case, your dependency status is based on whether you support a dependent other than a spouse. If you provide more support to your children than your parents, you are considered to have a dependent other than a spouse. Any support you receive from your fiance and from government benefit programs counts as part of your support to the children. But the support you provide must exceed the support your parents provide, which includes the fair rental value of the housing they provide for your children. You will need to do the math to see if you and your fiance are providing more support to your children than your parents. If you provide more support to the children, you are considered independent.
If you are independent, your parents’ information is not reported on your FAFSA. If you were married, your spouse’s financial information would be reported on the FAFSA. Since you are not married, your fiance’s income is not reported on the FAFSA. But any support provided by your fiance or your parents to you or your children must be reported as untaxed income on the FAFSA.
Will having my daughter claimed as a dependent on my parents’ tax return affect my student loan/financial aid? I had no income and put head of household on my financial aid application. I applied for financial aid by myself and my daughter lives with my mother while I attend school. — Kenneth M.
If your daughter is claimed on your parents’ income tax return, it means that your parents are providing more than half of her support. (There are some slight technical differences in the definitions of support used by the IRS and the US Department of Education, but they are usually not manifest in a situation where the student’s child is claimed on someone else’s income tax return.) If having a dependent other than a spouse was your only basis for independent student status, then you will be considered a dependent student and your parents will have to provide their financial information on your FAFSA. If your FAFSA is selected for verification, the college will question your head of household status, given that you have no income and do not have a qualifying child.
My 18-year-old brother is now under my care. I am 25 years old and I work full time and I am also going to school full time. My mother decided to move and left my brother without any financial assistance. He is a sophomore at a community college. I do not have a clue where to begin or what to do for him to get any financial assistance. I do not know if I am supposed to claim him in order for the FAFSA to help him out. If so, how do I start? — Andrea A.
Talk to the financial aid office at your brother’s college about your situation. Abandonment is sufficient grounds for a dependency override, but the college will want independent third party documentation of your family’s circumstances. Abandonment is defined as a lack of significant contact or support for an extended period of time, usually at least a year. If the college grants him a dependency override, he will be able to file the FAFSA on his own. Any support you provide him will then be reported as untaxed income to him on the FAFSA.
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