Few things are fuzzier than financial aid for children of divorced parents. Federal rules are straightforward, but many schools (especially private schools) depart from those rules when giving out their own need-based aid. So it's not unusual for aid offers to differ dramatically from school to school, depending on whose income counts and whose doesn't.
The federal rules say that if your parents are divorced, you should report the income and assets of the parent with whom you lived more than half the time last year on the FAFSA. The family income will include any alimony or child support the custodial parent receives. But even with those additions, students who live with single parents often qualify for more aid than those whose parents are married or remarried.
If the parent you live with is remarried, you must also report your stepparent's income and assets, even if he or she won't be contributing to your college expenses. The wedding might have been last month and your stepparent might have other children to support, but the federal formulas count his or her resources regardless. That means your eligibility for Pell grants, subsidized Stafford loans, and other federal and state aid will depend on your parent's and stepparent's combined income and assets.
What complicates matters further is that many private colleges (especially the most selective colleges) also ask for financial information from your noncustodial parent and, sometimes, your noncustodial stepparent. Some schools will merely file away this information and still conform to the federal rules. Others will consider replacing the custodial stepparent's resources with the noncustodial parent's resources, especially if the remarriage was recent, when determining how much institutional aid to give. And a few have been known to increase the family contribution on the basis of the noncustodial parent's income and assets. "The methodology is all over the map," says Linda Peckham, director of communications and training in the Reston, Virginia, office of the College Board. "The College Board approach [which a majority of the most selective schools follow] is to use two parents, either the two natural parents or the two custodial parents," says Peckham. "It's up to the aid officer to decide which are the appropriate ones."
What if a parent or stepparent refuses to supply financial information? Schools are hard-nosed about this. Usually an incomplete aid application means no aid, which often puts students in the position of pleading with their parents to complete the forms. But as with independent students, aid officers will occasionally make an exception. If you can document parental abandonment, alcoholism, chemical dependency, physical abuse, or other dire circumstances, you may be able to get a waiver that will allow you to receive aid without the parent's or stepparent's cooperation.
What if your parents are separated but not divorced? For federal aid, they'll be treated as divorced so long as you can show they live at different addresses. But for institutional aid, the school once again has discretion. "We don't accept [divorced] applications from separated parents," says the University of Michigan's Fowler. "We found they file separated and never divorce." But the University of Georgia will accommodate even newly separated parents whose most recent tax return was filed jointly. To compute family income, the school will take out the percentage of income and taxes paid that belong to the noncustodial parent, says Little.