Financial Aid and Divorce

Financial Aid and DivorceParents want the best for their children in all aspects of life. From the time a child is born, parents imagine the wonderful things the new addition to the family will one day be able to do and experience. Education is one of the most fundamental aspects of raising children, and many parents go to great lengths to ensure that their children are able to exercise the opportunity to attend college should the child decide to do so. However, even with extensive planning during a child’s younger years, divorce can cause some confusion and more than a few complications when it comes to financial aid for college. The following tips, adapted from an older U.S. News & World Report article, still ring true for almost any family dealing with divorce and the need to secure financial aid for their child’s continuing education.

Be Prepared for Difficult Discussions

Money is never an easy topic to discuss, not matter the circumstances surrounding the discussion. It is personal and can be difficult to approach, even for married couples. It does not get easier to talk about money after divorce, especially in situations in which a divorce did not end on the most amicable of terms. However, when it comes to college and financial aid, you are going have to talk about money. You will have to talk about it with your kids, with your former spouse, and with any other individuals who might be a part of your family. Being prepared to have these difficult conversations is the first step to approaching them in a positive and productive manner.

One of the most important parts of a divorce that involves children is designing and implementing a detailed co-parenting plan. While there are no laws that say either parent has to pay for college, many times parents can include provisions related to paying for college in their co-parenting plan. This might include monthly contributions to a college savings plan or it may include lump sum payments when tuition bills finally come due. No matter how you structure it, it is important to be clear and concise so that there is no confusion down the road. If your parenting plan does not have college-related provisions, it is important for you and the child’s other parent to gain an understanding about the terms and conditions often applied to financial aid as soon as possible. This may have a significant impact on your custody arrangement, support payments, and other concerns related to your divorce. If you let these things catch you off-guard, then it will be far more difficult to address and fix them.

Understanding Custody

For financial aid purposes, custody has a different and sometimes ambiguous meaning. It is not the legal meaning nor does it have the same meaning as it does for tax purposes. For financial aid purposes, custody refers to the parent that the child lived with the most in the previous 365 days. If a child has spent an equal amount of time with both parents during the previous 365 days, then there is an additional test to determine which of the two households provided more financial support for the child during that time period. The parent that is determined to be the custodial parent for financial aid purposes can have a significant impact on the amount and type of financial aid for which a child is determined to be eligible.

Do Not Provide Too Much Information

It is important to provide full financial disclosure, up to the point that doing so is required. Providing additional information beyond that can complicate the process and even potentially endanger financial aid for your child. For instance, many individuals want to include information about all parents and stepparents that may be involved in the child’s life. You typically only need to provide the federal government with information regarding the custodial parent and a stepparent in the custodial parent’s household. You would not need to provide additional information about the income of the non-custodial parent, though the custodial parent will be required to report child support income on financial aid forms.

In cases in which individuals live together but are not married, the rules are somewhat similar. While you may not need to provide detailed salary information for the individual residing in the custodial parent’s household, his or her contributions to the household will need to be reported under the section that asks for information about other untaxed income. Some private institutions may require additional information. However, you should only provide it if absolutely necessary. Much of this information may be required for financial aid connected to the private institution itself, but it is not required for federal financial aid. Providing too much information could make the child appear to have a greater amount of financial support than the maximum amount for the child to qualify for financial aid.

Anticipating Issues

As with many aspects of divorce, especially aspects affecting children, anticipating potential issues can help you handle them in a more productive manner when they inevitably arise. That is why it is crucial to work with an experienced divorce attorney that focuses their practice on working with clients going through divorce. Such attorneys understand the many nuances involved in divorce and can help you approach things like designing a co-parenting plan in a responsible and confident manner. Being thorough in your planning and working with your experienced Florida divorce attorney can help make sure that you include important provisions in your divorce settlement about your children, but also about things that are important to you. Tackling those issues during the divorce can help make sure you do not need to spend too much time or money revisiting them later in life. If you are considering a Florida divorce and want to find out more information about how it could affect you and your family, contact Scott J. Stadler to schedule a consultation where you can find out more about what the process might mean for you.