Who Fills Out FAFSA for Divorced Parents?

The Free Application for Federal Student Aid (FAFSA) serves as a gateway to various forms of federal financial assistance for higher education. For students whose parents are divorced or separated, navigating the FAFSA process can present unique challenges, primarily stemming from determining which parent’s financial information is necessary for the application. Understanding the specific guidelines for parental reporting is important to accurately complete the FAFSA and maximize eligibility for student aid.

Determining the Parent for FAFSA

Recent changes to FAFSA rules, effective for the 2024-25 award year and beyond, have altered how parental information is determined for students with divorced or separated parents. The FAFSA now primarily requires financial details from the parent who provided more than 50% of the student’s financial support during the 12 months prior to filing the application. This updated criterion supersedes the previous rule, which focused on the parent with whom the student lived for the majority of the time.

This definition of “parent” for FAFSA purposes may differ from legal custody arrangements, as legal custody agreements do not dictate which parent must provide financial information on the FAFSA. If both parents provided an equal amount of financial support to the student, the FAFSA instructs that the parent with the greater income and assets should be the one to provide their information. Child support payments are factored into this determination; specifically, child support received by a parent is considered untaxed income to them, while child support paid by a parent counts towards their financial contribution to the student.

If divorced or separated parents are still living together, even if informally separated or residing in different parts of the same house, both parents’ financial information must be included on the FAFSA. The FAFSA defines a “legal parent” as a biological or adoptive parent, or an individual listed as a parent on the student’s birth certificate. Grandparents, foster parents, legal guardians, or other relatives do not count as a parent on the FAFSA unless they have legally adopted the student.

Required Financial Information

Once the appropriate parent is identified for FAFSA submission, gathering their specific financial information is the next step. This includes various income sources such as adjusted gross income (AGI), wages, salaries, and interest income, typically found on federal tax returns like Form 1040 and W-2 forms. Untaxed income, such as child support received, untaxed pensions, and veterans’ non-education benefits, must also be reported.

Beyond income, the FAFSA requires information on assets. This includes current balances in cash, savings, and checking accounts, as well as the net worth of investments like stocks, bonds, mutual funds, and certificates of deposit. Real estate equity is generally included, though the value of the family’s primary residence is explicitly excluded from FAFSA asset calculations. Bank and investment statements are used for reporting these asset values.

Consider the impact of a stepparent’s finances. If the parent identified as the FAFSA contributor has remarried as of the date the FAFSA is filed, the stepparent’s income and assets must also be included on the application. This requirement applies regardless of any prenuptial agreements, as federal financial aid regulations consider the stepparent a source of support to the household.

Completing the FAFSA Application

With all the necessary financial information gathered, the next phase involves accurately inputting these details into the FAFSA form. The application is primarily completed online, and students will navigate to the parent’s financial section to begin this process.

The IRS Data Retrieval Tool (DRT) is a method for providing tax information. This tool allows for the automatic transfer of federal tax return data directly from the IRS into the FAFSA, which helps ensure accuracy and can reduce the need for additional documentation later. To use the DRT, the student and the parent contributor must provide consent and approval for the IRS data transfer, which is a mandatory step for federal aid eligibility.

There are specific situations where the DRT cannot be used, such as when parents filed taxes separately, filed foreign taxes, or amended their tax returns. In these instances, or if there has been a change in marital status since the tax year used, income and asset figures must be manually entered into the FAFSA form. This involves transcribing figures from tax documents and financial statements into the corresponding sections for AGI, untaxed income, and asset values. Review the application before electronic submission. Both the student and the parent contributor must electronically sign the FAFSA using their Federal Student Aid (FSA) IDs.

Addressing Special Situations

In certain circumstances, the standard FAFSA rules for divorced parents may not apply, or additional steps are required. One such situation arises when a parent refuses to provide their financial information. If this occurs, the student can still submit the FAFSA without parental data, but their eligibility for federal aid will be limited to Direct Unsubsidized Loans only. Contact the college financial aid office immediately in such cases, as parental refusal alone is not sufficient for a dependency override.

A “dependency override” is a process through which a college financial aid administrator can change a student’s FAFSA status from dependent to independent due to unusual circumstances. These circumstances may include documented cases of an abusive family environment, parental abandonment, human trafficking, or parental incarceration. To request an override, the student submits the FAFSA indicating an unusual circumstance, then contacts the financial aid office for documentation and explanation.

Some students are considered “independent” for FAFSA purposes from the outset, meaning they do not need to provide parental information at all. Criteria for independent status include:
Being age 24 or older
Being married
Being a graduate student
Serving in the U.S. Armed Forces
Being a veteran
Being an orphan or ward of the court
Being in a legal guardianship
Having legal dependents other than a spouse
Being an emancipated minor or unaccompanied homeless youth

For any unique situation, communicate directly with the financial aid office at colleges of interest for guidance. They can provide specific advice for complex cases.