Who is Considered a Family Member When it Comes to Filing for Financial Aid - Association of Certified College Funding Specialists

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Who is Considered a Family Member When it Comes to Filing for Financial Aid

FAFSA, CSS PROFILE, household strategies,

Who is Considered a Family Member When it Comes to Filing for Financial Aid
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Every year I receive questions on the member discussion forum requesting how to complete the household information on the Free Application for Federal Student Aid (FAFSA) financial aid form. The confusion always seems to be in the areas of divorced vs. separated parents; adoptive vs. biological parents; legal guardians vs. foster parents; grandparents; and dependent vs. independent students.

The legal relationship of those in the student’s household is strategic in regards to whose income and assets are reported on the FAFSA, and whether or not the student qualifies as a dependent or independent student. That being said, here is a simple explanation of how to determine each one of these family categories:

Married Parents

If the student’s parents are married, their income and asset information must both be listed on the financial aid application. If the student's parents are living together and have not been formally married, yet meet the criteria in their state for a common-law marriage, then they should report their status as married on the FAFSA and report their income and assets. If the state of residence does not consider the relationship to be a common-law marriage, then the parents should file as if they are separated.Step-Parents

Step-Parents

If the student has a stepparent, the stepparent's income and asset information must be included on the financial aid application, even if the stepparent was not married to the natural parent prior to signing the application. Prenuptial agreements do not affect this rule.

If the biological parent has died and the stepparent survives, then the student is considered an "independent student" (assuming the student is not dependent on the surviving parent), unless the stepparent legally adopted the student.

Divorced or Separated Parents

If the parents are divorced or separated, the income and asset information of the parent with whom the student lived the most in the last twelve months must be listed. The separation need not be a legal separation. The student's parents may consider themselves separated if one of the parents has left the household for an indefinite period of time and no longer makes a substantial contribution to the finances of the household.

If the student did not live with one parent more than with the other (as in the cases of joint custody), the income and asset information of the parent who provided the majority of financial support during the last twelve months must be listed. Support includes money, gifts, loans, housing, food, clothes, car, medical and dental care, payment of college costs, etc.

Widowed or Single Parents

If the parent is widowed or single, only that parent’s income and asset information is listed on the financial aid application.  If a parent dies before the application is signed, only the surviving parent's income and assets are listed on the application.  When a joint tax return has been filed, the surviving parent's income and corresponding tax liability is separated out and only these amounts are listed on the application. The surviving parent must list only his/her income and assets at the time of signing the application.  Should both the student's parents be deceased at the time the student signs the application, the student is considered an "independent student."

Adoptive Parents

Adoptive parents are treated in the same manner as biological parents. Their income and assets are reported on the financial aid application forms.

Foster Parents

If the student has foster parents, the foster parents’ income and assets are not reported on the financial aid application forms, unless the student is legally adopted by the foster parents.

Legal Guardians

If the student has a legal guardian, the guardian's income and asset information are not reported on the financial aid application, unless the student is legally adopted by the guardian(s).

Grandparents

If the student is living with grandparents, the grandparents’ income and asset information are not reported on the financial aid application, unless the student is legally adopted by the grandparents.

Number Of Household Members

The number of people in the student’s household is used in the calculation of the financial aid formula/FAFSA. The household number is reported on the FAFSA as of the date the FAFSA form is signed. Specifically, the “number of household members”, includes:

  • The student (even if the student does not live with the parents)

  • The student’s parents, including guardians or custodians)

  • The student's siblings, if they received or will receive more than half of their support from the student's parent(s) between July 1st and June 30th of the upcoming college year or if they would be required to report parental information on the financial aid application,

  • The student's children, if they received or will receive more than half of their support from the student's parent(s) between July 1st and June 30th of the upcoming college  year (even if the children do not live with the student's parent(s), they must  be counted if they meet this criteria),

  • The student's parents' unborn child  and/or the student's unborn child, if that child will be born before or during the upcoming college year and the student's parents will provide more than half of the child's support from the projected date of birth until the end of the college year (if there is a medical determination of a multiple birth, then all expected children can be included), and

  • other persons, if they live with and receive more than half of their support from the student's parent(s) at the time of signing the application and will continue to receive that support for the entire upcoming college year.

Number Of Household Members In College

The FAFSA form requests information on the number in the household that will attend college (excluding the student’s parents) between July 1st and June 30th of the upcoming college year.Members of the household (including the student) may be counted as college students if they are planning to enroll (or are accepted for enrollment) for at least six credit hours in at least one term.

Members of the household (including the student) may be counted as college students if they are planning to enroll (or are accepted for enrollment) for at least six credit hours in at least one term (twelve clock hours per week), even if they do not complete a term. They must also be working towards a degree or certificate leading to an education credential at a college or trade school that participates in any of the Federal student aid programs. A high school student merely taking college courses cannot be considered as enrolled in college.

Additional household members in college can greatly reduce the family EFC because the parents' contribution is essentially cut in half if there are two household members attending college, and a third is there are three household members attending college, etc.

Independent Students

An independent student does not have to report the parents’ income and assets on the financial aid application forms and therefore may stand a better chance to receive need-based financial aid from a college.  To determine if the student qualifies as an independent student, the financial aid rules regarding independent students must be reviewed.

Criteria for Independent Student Status

An independent student is one who meets one of the following criteria:

  • Will be at least 24 years of age by December 31st of the school year

  • Is a veteran of the US Armed Forces or one of the service academies

  • The student must have been released under a condition other than dishonorable.  The student must have been in active duty, not the National Guard or a Reserve enlistee

  • Is a graduate or professional student (a professional student is a student pursuing a course of study beyond a bachelor's degree)

  • Is a married student

  • Is a ward of the court, unless a legal guardian has been appointed by the court and is specifically required by the court to use the guardian’s own financial resources to support the student

  • Have parents who are both deceased

  • Has a legal dependent other than a spouse

  • a legal dependent is any person who lives with the student and receives more than half of his or her support from the student and will continue to receive more than half of the support from the student during the college year, or

  • any child (including an unborn child) of the student who receives more than half of the support from that student is considered a legal dependent, even though the child does not have to live with the student. The child can be a natural or adopted child, or a child for whom the student is legal guardian



 

 
Ron Them

Ron developed and trademarked the CCPS® (Certified College Planning Specialist) designation. For over 20 years, the nation's leading financial advisors, broker/dealers, and major media outlets have been using his research, funding strategies, training, and insight. Ron is highly regarded as an expert in the college funding field.

He is a former Chief Financial Officer of a Fortune 500 company and currently owns his own financial advisory company specializing in cash flow planning for business owners and executives. He developed the Cash Flow Recovery™ process that uses cash flow management principals to increase asset value and build wealth for business owners.

He is also the originator of several software calculators to help advisors and families make college affordable, including:

  • College QuikPlan EFC Calculator
  • "Find the Money" College Cash Flow Calculator
  • College Debt Reduction Calculator

Ron has been quoted in U.S. News and World Report, Kiplinger's Personal Finance, Smart Money, Financial Advisor Magazine, Small Firm Profit Report, Practical Accountant, LIMRA's Market Facts, Senior Advisors Magazine, HR Magazine, BenefitNews.com, Employee Benefit News Magazine, ProducersWeb.com, Entrepreneur Magazine, Insurance Selling Magazine, CollegeNews.com, The Christian Voice, and Columbus CEO Magazine.

 

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