Both of my daughters' parents have re-married. Whose income is counted for financial aid? Just biological parents or their spouses too? Does primary parent fill out the paperwork or the parent with the lowest (or highest) income? — M.J.When a student's biological/adoptive parents are divorced, only one of the two parents is responsible for completing the Free Application for Federal Student Aid (FAFSA). Both may be required to complete the CSS/Financial Aid PROFILE form, a form used by about 250 mostly private colleges.The parent who is responsible for completing the FAFSA is often referred to as the custodial parent. This is not necessarily the same as the parent who has legal custody of the student. The custodial parent is the parent with whom the student lived the most during the 12 months ending on the FAFSA application date.It is possible that the student lived with neither parent more than the other. This is rare, since there are an odd number of days in the year. However, it can happen during a leap year or a recent divorce, especially if the parents share joint custody. It can also happen when the student is living with neither parent. For example, the student might be living with a relative other than the parents or the student might be living at school for the entire year. If the student lived with neither parent more, the custodial parent is the parent who provided more support to the student during the 12-month period ending on the FAFSA application date (or the most recent calendar year during which support was received if that does not distinguish the parents). Multiple support agreements, in which the parents trade off who claims the student as an exemption on their federal income tax returns, are irrelevant since the definition of support in the Higher Education Act of 1965 differs from the definition used by the Internal Revenue Code of 1986. If neither parent provided more support, the family should consult with the financial aid administrator at the college before filing the FAFSA. In most cases the financial aid administrator will require the parent with the greater income to complete the FAFSA. Divorced parents may have some flexibility in determining the custodial parent by controlling the student's living arrangements. Generally, need-based financial aid will be greater if the custodial parent is the parent with the lower income. However, college financial aid administrators will question the arrangement if the student attended secondary school in a school district that does not match the custodial parent's address. The college financial aid administrator may ask for a copy of the divorce decree or separation agreement to resolve the conflicting information. So it is generally a good idea to seek a court modification to the custody agreement corresponding to the actual living arrangements. If the parent responsible for completing the FAFSA has remarried, then the step-parent's financial information must also be reported on the FAFSA. Prenuptial agreements are irrelevant, as the requirement to include step-parent information is established by federal law (section 475(f)(3) of the Higher Education Act of 1965). Approximately 250 colleges require families to file a supplemental form called the CSS Financial Aid PROFILE in addition to the FAFSA. The PROFILE is used to apply for financial aid from the college's own funds. The rules for determining the parent responsible for completing the PROFILE are similar to the rules for the FAFSA. However, the non-custodial parent is require to complete a Non-Custodial Parent CSS PROFILE form (NCP). Potentially all four parents could be required to supply financial information on the PROFILE and Non-Custodial PROFILE forms, if both biological/adoptive parents have remarried. Sometimes divorced parents are unwilling to complete the Non-Custodial PROFILE form or even the FAFSA because they fear that their ex-spouse will be able to see their income and asset information. The Family Educational Rights and Privacy Act (FERPA) prohibits revealing parent financial information to the student. Colleges also cannot reveal parent financial information to anybody other than the parent who provided the information.
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