Divorced or Single Parent & College Student Financial Aid
Free Application for Federal Student Aid Fules and Divorce
Federal Student Financial Aid and DivorceOne area left out of many divorce decrees is planning for college. In some states child support stops when the student graduates high school making things even more difficult for single parents. As of 2011, the Free Application for Federal Student Aid (FAFSA) has many rules for single parents and they vary depending upon which parent has physical custody of the kids (which parent the student lives with the longest).
Divorcing or divorced parents can plan and take advantage of the FAFSA rules when deciding:
- Custody arrangements
- Which parent should maintain and control any 529 educational savings accounts
- Strategies for any assets that students currently own
- Whether the decree should order both parents to assist with college payments based on the Expected Family Contribution (EFC) of the custodial parent, or perhaps based on the EFC of the parent with the lower income
- Relocation - what state would be best for the children and custodial parent to reside in based on college goals
It's never to early or too late to begin taking some steps toward receiving Federal student aid. As with most financial investments, the earlier you begin planning the better. Divorcing parents with babies or toddlers can take steps that, along with compounding growth, may make a huge difference in sheltering their assets when it comes time to compute college costs. Parents with high school students still have time to make adjustments as well.
Divorcing parents will learn strategies to increase the amount of free aid for their child, whether it is from the Federal Government, free aid offered by the college to the student, or a combination of both.
Divorced Parents Paying for CollegeWhen your family is going through a military divorce and revieiwing the family finances, don't forget about the kids. Planning financially for your children is an important part of any divorce.
If your children are already working, explore the option of opening a Roth IRA, not only to secure their future retirement but also to shield family assets when it's time to apply for colleges. If they are not working, you can employ them as a household employee or encourage them to become an entrepreneur.
How You Can Maximize Student Aid explains the components that determine federal student aid, the better places to save, and what you should think about come tax time. The goal is to maximize aid while keeping assets accessible, growing with tax benefits.
- Free Application for Federal Student Aid (FAFSA): Quick overview
- Expected Family Contribution (EFC): Detailed formula explanation
- Ideas for All Income Levels: Take advantage of formula rules
- Tax-free and Tax-deferred Places to Save: Explore investing options
- Education Accounts: Choose the right one and who should own it
- Life Insurance: Discover all the flexible uses
- Single or Divorced Parent: Learn valuable strategies just for you
- The College Offer: Distinguish between free money and award of debt
- Tax Benefits for Education Expenses: Make smart choices
A mistake on the FAFSA can result in loss of several thousands of dollars in aid. This valuable reference guide will provide you with new ideas and help you prioritize, whether you are saving for a newborn or if college is looming just around the corner.
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Also check out the advantages of students owning a Kid Roth IRA.