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Child support, divorce and financial aid

If there aren't enough things for divorcing parents to consider like complicated questions of alimony, property division and child custody, difficult financial situations such as college tuition payments also factor into the details of a divorce proceeding. As experts take a close look at financial aid applications as they relate to divorce, it becomes increasingly clear the divorce decree can have serious implications on financial aid awards.

Any California resident applying for financial aid will be asked to include his or her parents' income, if a dependent, in the application process. If divorce is involved, subsequent family schedules can have a substantial impact on the aid awarded. While one may think a financial aid application would include the applicable partial incomes of the custodial parent and the parent paying child support, that is not necessarily the case.

According to experts, instead for many schools, only one parent's income is reflected on the financial aid form. That is often the parent that has had custody, or the most custody of the child, in the months leading up to the application. Further, if this parent is remarried, his or her spouse's income may also be required to be included on the application - The higher the reported income, the lower the financial aid award.

If the most recent custodial parent is the greater bread winner, than a financial aid award could be reduced significantly. If that parent has also remarried, a future student may have two adult incomes on the aid application, whether the student will ever see the benefit of both of those incomes.

Experts advise that parents looking to receive the greatest benefits should ensure the child stay with lower income earner the months leading up to the application process. However, it is also important to only apply as the custodial parent if one is actually that. Universities investigate in order to verify claims made by the future student. If the student is attending a high school out of the alleged custodial parent's neighborhood for example, the school may have serious concerns about the application.

It is important to be informed of all issues that can be affected by divorce. This is why it is important for a separating spouse to have adequate representation in all family law legal issues.

Source: Wallstreet Journal, "Financial aid and divorce," Rachel Louise Ensign, Dec. 28, 2012.

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