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Daniel Barkowitz

Sep 14, 2006

It’s Not Apparent Who is a Parent

Posted in: Afford

So, in good faith, you’re ready to start the financial aid application process, you’ve gathered paperwork, gotten your pencils sharpened (or more probably, your fingers ready for some furious typing) and you come upon the first challenge to your logic. Who is your parent? Now of course, by “you” I am referring to you, the student. You may think it is fairly easy and straightforward to define who your parents are. Boy, would you be wrong.

In all cases, the main financial aid applications (namely the FAFSA and CSS Financial Aid Profile) should be completed by the custodial family. If your birth parents are married to each other, this is pretty easy: “Mother” is mom and “Father” is dad.

If your birth parents are divorced, separated, or were never married, then you only fill out information about the parent with whom you live (and, here is a tricky part, his or her new spouse, your “stepparent”). When it asks for mom’s information, you will leave it blank if you live only with your dad, and conversely if it asks for dad’s information, you should leave it blank if you only live with your mom. If your parent is remarried, you should put the stepparent’s information under the appropriate heading (“father” for stepfather, “mother” for stepmother).

Confused yet? No? Well, read on, McDuff…

Well, what if your parents are divorced and you lived with both of them equally during the last twelve months (in other words, the custody arrangement is something like, stay at mom’s from Sunday – Tuesday and every other Saturday, and with dad the rest of the time)? Then you would complete the form based on the parent who provides most of your financial support during the last year.

Does this absolve your other parent from completing any information? NO, A SOLID AND RESOUNDING NO. Colleges may request (and here at MIT we do request) a Non-Custodial Parent Profile for students who do not live with both of their birth parents. This form should be completed by the non-custodial parent, and most likely will need to be done on-line (depending on the college's preference). Once you (the student) register for the Profile and indicate that your birth parents are not married, you will be sent an email with instructions, a temporary password, and a link which you should forward to your non-custodial parent for him or her to complete.

Does it end yet? Well, sort of…

Then it becomes our job in the financial aid office to determine which ones of your parents – birth and step – should be considered as providing part of the contribution we will expect from you. In most cases, we at MIT only will expect a contribution from two parents, and in most cases we will want those two parents to be the birth parents, but this varies widely case by case. If you are in one of these situations, you should talk to your financial aid counselor after you receive your financial aid award to understand how we analyzed your file and why we did what we did.

The way we determine how much each "family" can contribute is by looking at each household independently. We perform separate analysis on each household (using all parties incomes and assets in the household) and then divide up the resulting contribution by a factor based on the share of income brought to the family by the parent we are taking (and by adding to the figure, 1/2 of the contribution relating to assets). We then take the two figures, one from birth mom's household and one from birth dad's household, add these together, and use the resulting figure as the Parent Contribution for the student.

Let's look at an example:

Clarissa is applying to MIT for Fall 2007. Her mom and dad were divorced in 2000, and her mom has remarried since (in 2005). Her dad has not remarried.

When we analyze Clarissa's application, we will want information from three parties, her mom, her step-dad, and her dad. We will complete two financial aid analyses, one on her mom and step-dad, and the second on her dad alone.

Clarissa's mom earned $40,000 in wages last year, and Clarissa's step-dad earned $50,000. There was other income in the family (unemployment compensation, interest income, etc.) of $10,000. Between them, Clarissa's mom and step-dad have $120,000 in investments.

When we look at Clarissa's mom's contribution, we will take the total family income contribution (let's say it equaled $10,000) and multiply it by a factor determined by the percent of the total income that was mom's (in this case, $40,000 wage + 1/2 of the 10,000 other income / total income of $100,000, which equals 45%). So the income contribution for the family is $4500.

As for assets, we will take the asset contribution (let's say in this case that was $6000) and divide it in half, assuming that all assets are shared jointly (whether they are in fact or are not).

So Clarissa's mom's total contribution would be $7500 ($4500 income contribution + $3000 asset contribution).

Clarissa's dad would be much easier to analyze since there is no one else sharing his household, so his contribution will not be adjusted by any factor (and his income and assets would be his alone). Let's say his contribution was $4500.

So, as a total, we would have mom's $7500 contribution and dad's $4500 contribution, which totals $12,000.

Once piece we cannot share with you, unlike we are doing in Clarissa's case, is who earns what or who is able to contribute what for your particular situation. Without full written permission from all parties, we must keep information you provide to us confidential; this is also true for the information we receive from your parents, stepparents, and others.

So hopefully now it is apparent who is a parent. If it isn’t, email me and we’ll talk about basic biology!

Comments (Closed after 30 days to reduce spam)

Best title ever.
almost as good as "FREE FOOD!!!". Almost.

Posted by: JKim on September 14, 2006

Thank you! wink

Posted by: Kelly on September 14, 2006

Thanks for the post, i find it very informative. I have a special difference between what you say should be obviously apparent, and my situation. Could you give me more insight as to what my EFC would be if say my family tree worked this way?

Live with grandparents
Me- works part-time- 12,000 a year- no assets
grandmother- retired - no income
grandfather- retired- pension of 30,000 a year
no assets- house is mortgaged (120,000) leases car

Mother- 23,000 a year- does not contribute- no assets- re-married to someone on disability who does not contribute either
Father- Unsure (not much)- owes 20,000 back child support and has just started paying 300 a month in support.

Also my mother is filling out papers to forfeit her child support to me as an emancipated child. So basicly the child support will go to me directly.

Given these circumstances, how does this equation look for me?
Thanks for any response or suggestion.

Posted by: Nicolas Wilson on September 25, 2006

Interesting case, Nicholas. So, a couple of answers to your questions:

1. The Federal guidelines are pretty clear here. Since your Mom and Dad are still living, then one of them needs to be your custodial parent (regardless of the fact that you live somewhere else). The question remains, which one should be the custodial parent. The first determinant would be who did you live with more during the last 12 month period. If the answer is neither, then you would look to who provided you with more financial support over the last 12 months. If that answer is neither, then the final test is who proved more support in the last year in which you received support from them.

2. There are situations, however, where this test is still not appropriate (and yours may be one of them). In these situations, financial aid officers are given the ability to use their "Professional Judgment" to override the dependency tests and use their own measures. The risk here is that every college (and indeed every officer) might come up with a different answer. Some possible choices could be: 1) use the Federal Guidelines, 2) make you independent (and therefore no parental information of any kind is required), 3) treat your grandparents as your parents, and require income and asset information from them. You will need to contact the financial aid office at the colleges in question to see what option they choose. For us, we would need much more information (and I would not post it here) about the circumstances which find you living with your grandparents. Is it a matter of convenience? Necessity? Safety? Etc.

Remember that if your mom is determined to be the custodial parent for the purposes of the FAFSA, then your step-dad's information will be required as well. Based on your outline above, though, it would probably be more likely your father who is chosen anyway, as he is the one paying (or rather owing) child support.

In addition, remember that if either parent is chosen as the "custodial" parent, the other one will likely need to complete a "non-custodial" application for Institutional funds.

Wow! If you want to contact someone in our office directly to explore your case, you should go to http://web.mit.edu/finaid/contact/index.html and find the contact information for your financial aid counselor. You can begin to work with her to establish your case for the coming year.

Posted by: Daniel Barkowitz on September 26, 2006

Comments have been closed.

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