If your parents are separated or divorced, the custodial parent is responsible for filling out the Free Application for Federal Student Aid (FAFSA). The custodial parent for federal student aid purposes is the parent with whom you lived the most during the past 12 months. (The twelve month period is the twelve month period ending on the FAFSA application date, not the previous calendar year). Note that this is not necessarily the same as the parent who has legal custody. If you did not live with one parent more than the other, the parent who provided you with the most financial support during the past twelve months should fill out the FAFSA. This is probably the parent who claimed you as a dependent on their tax return. If you have not received any support from either parent during the past 12 months, use the most recent calendar year for which you received some support from a parent. Biological parents who never married are treated the same as parents who are divorced. Note, however, that any child support and/or alimony received from the non-custodial parent must be included on the FAFSA. Please note that the discussion given above applies even if the parents each have equal 50% custody. The term "custodial parent" is not synonymous with custody. Usually the parent with whom the student lived the most during the past 12 months is sufficient, since there are an odd number of days in the year. However, in some cases a tie-breaker is needed, in such circumstances it is based on whichever parent provided more support. If that is not definitive, then the financial aid administrator at the college will make the decision, and this will usually be based on whichever parent has the greater income.
Financial aid applications can be somewhat confusing because there are several different criteria applied for different kinds of parenthood:
- The parent with whom the child lived the most during the past 12 months (the 12 months ending on the FAFSA application date).
- The parent who provided more financial support to the child during the past 12 months.
- The parent who provided the most financial support to the child during the most recent calendar year for which either parent provided more support to the child.
- The parent who provided more than half the child's support (and will continue to do so).
- The parent who has legal custody.
- The parent who claimed the child as a dependent on their tax return.
- The parent with the greater income.
Criteria 1, 2 and 3 are used for determining the custodial parent, with the first criteria being primary. In a situation where the parents split all costs equally, criterion number 7 is often used.
The Federal government does not consider the income and assets of the non-custodial parent in determining a student's financial need. However, it does consider child support received by the custodial parent.
Where the student parents are divorced, and the parent the student is living with has remarried, the stepparent has to report his or her income and assets on the FAFSA.
If the parent you're living with is the one filling out the FAFSA (your custodial parent), the stepparrent must report their income and assets even if they weren't married to them in the previous year.
The non-custodial parent can only take advantage of the education tax benefits when he or she claims the child as a dependent. If the non-custodial parent does not claim the child as a dependent on his or her income tax returns, but the custodial parent does, the custodial parent can claim an education tax credit based on the tuition paid by the non-custodial parent.