If you are a student in Texas that needs financial aid for your college tuition, whichever the type, you will need to complete the Free Application for Federal Student Aid form (FAFSA) or the College Scholarship Service (CSS) profile, that is if your institution is among the colleges that the College board sponsors. These applications take into account the income and assets of both parents, so if you have divorced parents, the financial entanglements that may come with their separation may impact how you’ll apply for these financial aids.
How income affects financial aid
If you have listed both your parents on your FAFSA application, and each has their own taxable income, then the expected family contribution (EFC) will take into account both incomes when deciding how much aid you qualify for. This means that if one parent has a low-income job or no job at all, it could reduce your EFC and get you more financial aid. On the other hand, if both parents have high-income jobs and combined assets of more than $50,000, your EFC will be much higher, and you may not qualify for as much financial aid as someone whose parents make less money.
Additionally, suppose the divorce court judge ordered one parent to pay child support or alimony. In that case, the Office of Federal Student Aid could take this into account when calculating your Expected Family Contribution (EFC). Usually, the parent that pays child support is responsible for a larger portion of the EFC.
Your parents can take certain steps to try and increase your financial aid package. One could be delaying taking retirement distributions until you complete your FAFSA form. This could help lower their income and result in a larger amount of financial aid. Also, your parents should consider avoiding remarriage, especially the custodial parent, until after you get the aid package. Lastly, if your parents can change the terms of their custodial arrangement so that you live primarily with the one who is less well off, your financial aid could potentially increase.