Three Simple Ways for Separated or Divorced Parents to Save Big on College Costs

Importantly, divorced parents in New Jersey have a legal obligation to contribute to college costs and expenses for their children.

By the same token, decisions about where your child will attend college requires planning and discussion.  Particularly if your child is in high school, you don’t want to find yourself scrambling during the final negotiations of your divorce agreement to come up with how to select and pay for colleges.

When parents are living separately, the income for the parent with whom the child lived more than the other over the past year is to be reported on the Federal Student Aid (“FAFSA”).

Here are three simple ways  for divorced  or separated parents to maximize financial aid and save big on college costs:

  1. Structure the custody and parenting time arrangement so that the lower-earning parent is the custodial parent. Even 51% of parenting time by that parent would likely be enough for the lower-earning custodial parent fills out the FAFSA, giving the student the best chance of qualifying for the most financial aid.
  1. Identify which parent will be responsible for completing the FAFSA in your divorce agreement. Generally, the child may be eligible for more financial aid if the parent with the lower income is responsible for completing the FAFSA.
  1. Allocate the dependency exemption(s) to the lower-earning parent in the year on which financial aid will be based. This should be clearly stated in your divorce agreement and is beneficial to both parents – and of course the child – particularly if the higher-earning parent receives little or no financial benefit from a dependency exemption.

For more tips for selecting and paying for college if you’re divorced or separated, please call me directly or click here to schedule a personal and customized consultation.

 

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