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How Does Divorce Affect FAFSA and Financial Aid?
Divorce can significantly alter a family’s financial future, making it difficult to plan ahead for the various needs that will arise. One often overlooked matter is the divorce’s effect on paying for a child’s college education. A once-solidified plan may unravel, leaving families scrambling to adjust to new financial realities. This shift can be overwhelming for parents and students alike, but an Illinois divorce attorney can help you understand how divorce impacts college funding strategies.
What Is FAFSA and Why Is It Important for Divorced Parents?
FAFSA (Free Application for Federal Student Aid) is a form used by the U.S. Department of Education to determine eligibility for federal student aid, which includes grants, work-study, and loans. For divorced parents, it is crucial to understand how FAFSA evaluates parental information. More specifically, only the custodial parent's financial details need to be reported on the form. This can work to the student's advantage if the custodial parent has a lower income, as it may increase their eligibility for need-based aid.
How Does Child Support and Alimony Affect FAFSA?
Child support and alimony are considered income on FAFSA. If the custodial parent receives child support, this must be reported and will count toward the income used to determine financial aid. Similarly, alimony is treated as taxable income. It is important for divorced parents to keep accurate records and understand how these payments can affect the total expected family contribution.
Can the Non-Custodial Parent's Financial Information Be Requested?
In most cases, the non-custodial parent's financial information is not required on the FAFSA document. However, some colleges require additional financial aid forms that may include information from both parents. To prepare accordingly, divorced parents should contact each college to understand its specific requirements.
How Does Remarriage Affect Financial Aid?
If the custodial parent remarries, the new spouse’s income and assets must be included when filling out the FAFSA form. This can substantially change the expected family contribution, potentially reducing the student's eligibility for federal aid. Parents should be aware of how a new marriage will impact financial aid calculations as they work on creating an updated and effective plan.
How Can Divorce Planning Help Maximize Financial Aid?
Planning for divorce can include strategies to maximize a student’s financial aid eligibility. This may involve considering which parent will have custody during the years in which the child will apply for financial aid. It is also helpful to carefully time significant financial transactions, as changes to a parent’s income or assets can influence their child’s aid eligibility.
Contact a Kane County, IL Divorce Attorney for Guidance
If you are facing a divorce and need to plan for your child’s college career, a knowledgeable attorney at Shaw Sanders, P.C. can help you navigate which financial aid options are best for your circumstances. Contact a St. Charles, IL divorce lawyer at 630-584-5550 to schedule a free consultation and learn more about how we can assist you.
630-584-5550