FAFSA And CSS Profile: Which Divorced Parent's Income Should Be Reported?

In the all too common situation of a student applying for financial aid for college who has divorced parents, the question often comes up about which parent's assets and income should be reported on the FAFSA and CSS Profile college aid forms. After all, it is also very common that one parent has a higher income than the other, even if the assets may have been split up during the divorce, and regardless of what a divorce decree may say about which parent pays for college.

The (parent) question is a good one because the financial aid formula expects parents to contribute up to 47% of their after-tax income toward the cost of college each year, in addition to 5 to 5.64% of their non-retirement assets. Given that income gets assessed so heavily, if a student has one parent with a much lower income it seems logical that the lower income parent is the one you'd want to list income and assets for on the FAFSA to reduce the expected family contribution (EFC) toward college costs. The greater a student's EFC, the lower the aid eligibility.

FAFSA: Custodial Parent Financial Information Only

The good news is that the FAFSA only asks for the custodial parent's finances to be listed. So the question becomes, how do you decide which parent is the custodial parent. The FAFSA rules provide two steps to decide which parents finances get listed.

1. The parent with whom you resided the most over the last year.
2. If you resided with both parents equally, list the financial information for the parent who provided the most financial support over the past year.

CSS Profile: Both Custodial And Non-Custodial Parent Financial Information

For many of the colleges requiring the CSS Profile aid form in addition to the FAFSA, the rules are different. Most, but not all, colleges that require the CSS Profile will require financial information for both the custodial and non-custodial parent information to be reported.

The non-custodial parent will be required to submit the non-custodial CSS Profile and the custodial parent will list his or her information on the main form along with the student. Don't worry, each respective form has separate logins for the two parents so they cannot see each others financial information that is being reported.

Tip: Divorced parents, you better identify ahead of time which colleges require which aid forms, because the reporting difference can mean your child could qualify for tens of thousands of dollars in aid at one college and absolutely no aid at another college.

Custodial parents finances are reported on the FAFSA, but both parent's finances are reported on the CSS Profile.