By: Vicki Vollweiler – Founder of College Financial Prep
It’s back to school season! Yay! Even though this year certainly feels a little different (ok, very different, depending on where you are in the country), some things remain the same. Our children are growing up and as they complete their high school education, most will likely wish to head off to college. Whether college is in person, online or some combination for our students, one thing we know for certain and can count on is that the price of a college education, including tuition, room and board, lab fees, computer fees, health fees, and many, many more fees can be daunting; especially for parents who are either separated or divorced.
Sending children to college is most often a very expensive proposition. And now, because the financial stress of sending a child to college isn’t enough, add in the stress that parents are under when dealing with a separation or divorce and communicating with the other parent regarding college for your child. We all want to ensure that we are each doing “the right thing” and what is in our child’s best interest. Unfortunately, this may look different to both parents. And it is important to consider what may already be stated within an existing divorce agreement.
When such a scenario presents itself, it is important to think strategically through the entire process from selecting which colleges your child should apply to all the way through paying for all of the college years. The goal is to maximize financial aid offered by the schools, whether merit or need based aid, minimize your out of pocket costs and reduce the need for student loans as much as possible.
Some key things to consider when Separated or Divorced and thinking about college:
- Determine Who The “Custodial Parent” Is.
The person who is listed within your divorce agreement is not automatically or necessarily the custodial parent for financial aid purposes. Also, the custodial parent is not necessarily the person who claims the child as a dependent on their tax return.
It is through careful advance planning that it is possible to ensure that financial aid can be maximized by allowing the lower income parent to be the custodial parent for financial aid purposes. It is especially helpful if that lower income parent resides within the child’s school district.
- Strategically Apply To Schools That Will Not Require Financial Information From Both Parents In Order To Maximize Merit and Need Based Aid.
Now that we know who the custodial parent is, some colleges, will only require information from the custodial parent and not from the non-custodial parent. (Even with 50-50 joint custody, it is still possible to determine who the “custodial parent” is for financial aid purposes.)
Some colleges, though, require financial information from all parents (this includes step-parents from remarriages too!) when applying for financial aid. When considering which colleges to apply to, it is important to determine what financial information will need to be shared with the colleges and universities, which financial aid forms are required (FAFSA and possibly CSS Profile) and to apply accordingly based on your specific financial and academic goals.
- Find The Schools That Will Offer Merit Aid
Before your child finalizes which colleges to apply to, in addition to reach, on target and safety schools, make sure that your child also includes some financial safety schools on their “college list”! With research, it is possible to determine which schools will likely offer your child merit aid and which schools are also likely to offer need based aid. The ideal goal is to find a college that is affordable
Finding the schools that will offer merit aid, usually comes with the realization that both parent and child need to be flexible as to which schools to apply to. The schools that may not currently be on your radar may be the schools that offer a great academic, social and financial fit for your child even if it is not a school seen on all of the bumper stickers in your town..
- Complete Financial Aid Forms Correctly
First, if newly separated or divorced and not remarried, make sure that the parents are living apart for more than 6 months. This is a requirement to file the FAFSA with just the custodial parent’s financial information.
Additionally, so many times errors are made on the FAFSA form and CSS Profile leading to unnecessary increased college costs. Typos occur, parent and student information gets mixed up, an extra “0” is accidentally added, small business information may be wrong and the custodial parent may be incorrect; among other things.
- Consider Whether There Has Been A Downward Change In Household Income Due To Divorce (from the tax return used.)
For financial aid purposes, your tax return from two years prior to college entrance is reviewed. This means that for students who will enter college in Fall of 2021, they will use theirs and their parent’s 2019 tax return information for their financial aid forms. (However, assets in the bank should be current as of the date of filing.)
Since two year old tax data is used, it is possible for life to have changed considerably for the household. There may have been a separation or divorce, a parent may have lost a job, there may be a serious medical illness or worse.
With these life changes not yet being reflected in your current tax return, it is possible to receive more financial aid than initially offered by the colleges. The key is to present a strong case. This can be done anytime during the child’s college career.
- The last major area to discuss as a method for saving money on the cost of college is the dreaded “C” word. Communication. It is so very important that we try to communicate both with our former spouse and with our child in terms of goals and expectations.
When possible, I always recommend to clients that they discuss amongst themselves and with their child the amount that has been saved for college; what type of college they hope that the child will attend whether public, private, out of state, local; if there is a financial cap regarding yearly cost; and any other major considerations.
The goal is for everyone to be on the same page and working towards a common goal. Otherwise, there may be lots of resentment and heartache when a final decision needs to be made that could potentially cost hundreds of thousands of dollars.
As the founder of College Financial Prep, and a divorced mom myself, I know first hand how hard it is to manage the challenges that come with “Divorce and College” and how it goes way beyond the emotional struggle of watching our children grow up, though that, of course, is real too!
With careful advance planning, it is possible to spend the least amount of money necessary to ensure, both, your child’s success and happiness while allowing you to maintain your bank account and not go into debt. I know that we all want the absolute best for our children, especially, when preparing for college. The key is to be informed, strategic and detail oriented so that you can maximize savings on the cost of college. If you’re unsure how to proceed, don’t potentially lose thousands and thousands of dollars. College Financial Prep was created to guide families through the maze of college financial aid.
Vicki Vollweiler, Founder of College Financial Prep is a divorced mom of two children who understands the financial complexities of sending a child to college. Her work with families (primarily those who are divorced) throughout the entire financial aid process starts from strategically creating a college list through financial aid form preparation, appeals and student loan guidance which ensures that families are able to maximize college savings and minimize costs.
