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Filing For Divorce May Help FAFSA Results (EFC)

I routinely get emails from readers with various questions about paying for college, saving for college and the financial aid process. I encourage these questions because not only do I get the opportunity to assist a family but it also helps me to identify any trends in college funding that are impacting the families that I work with day in and day out. Some questions/answers I post on CheapScholar for all to learn from and others I just respond to directly.So if you ever have a question – drop me a line! I don’t have all the answers but I will do my best.

Here is our most recent Help A Reader question:

Question: My husband and I are going through the motions of what will ultimately end in a divorce. It has been fairly amicable and basically it is up to us when we want to pull the trigger and finalize the paper work. Given that we have a high school senior daughter that is going through the college search process, I would like to know if there would be any benefit (or penalty) on our FAFSA/Financial Aid based upon when we file for our divorce?

Answer: Going through a divorce or watching someone else experience a divorce is a sad moment for many. Reason being – all you can think about is how darn happy they were on their wedding day. However, through some series of events and life changing moments, the relationship ends in divorce. Ok.. enough of my Oprah Winfrey¬† moment…

A divorce can actually sometimes be a good thing when it comes to your FAFSA and the Estimated Family Contribution (EFC). The FAFSA states that it just depends on which parent the student decides to live with or gets the most support from. If they live with (or get the majority of their support) from the parent that has the most income and assets, then it will probably result in a higher EFC. However, if they live with (or get the majority of their support) from the parent that has the least income and assets, then it will probably lower their EFC and make them more eligible for need based financial aid.

So, to answer your FAFSA timing question…¬† Depending on who makes the most money and who is responsible for providing the most support for your daughter, a divorce may have an impact on your FAFSA situation. From a timing standpoint, if you decide that the divorce is going to favorably help your situation, you need to make sure that the paperwork is finalized PRIOR to filing the FAFSA. When you file the FAFSA, you have to answer the questions based upon your status at the time of filing (divorced or married).

If you are divorced the FAFSA states: “In case of divorce or legal separation, give information about the parent you lived with most in the last 12 months. If you did not live with one parent more than the other, give information about the parent who provided you the most financial support during the last 12 months or during the most recent year you received support. If your divorced or widowed parent has remarried, also provide information about your stepparent.”

I hope this information helps to answer your question. If you have a follow-up question to this one, please don’t hesitate to drop me a line or leave a note in the comment section below.

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