How to Choose the Right Parent for FAFSA if Parents Are Divorced

If youre a divorced parent preparing for your childs college journey, youre probably staring at the FAFSA form wondering, Whose information goes where? Youre not alone. This is one of the most common questions I receive from families inside The College Planning Mastery Program.

Hi, Im Tracy Armstrong, and I specialize in helping families, especially those who earn too much to qualify for major need-based aid but still can't comfortably pay full sticker price, develop strategic, realistic plans to pay for college. If your parents divorced, FAFSA rules feel like a maze. Im here to guide you through it with clarity and confidence.

Lets talk about how to choose the right parent for FAFSA purposes and why that decision could significantly impact your financial aid eligibility.

Why FAFSA Requires Just One Parents Information

The FAFSA (Free Application for Federal Student Aid) determines your familys eligibility for federal student aid. When parents are divorced or legally separated, the FAFSA only requires one parents financial information, not both.

Sounds simple enough, until you try to figure out which parent.

The truth is, the parent you list on the FAFSA can drastically affect how much aid your child receives. This isnt about manipulating numbers or gaming the system. Its about understanding the rules and making informed, ethical choices that align with your familys financial reality. Thats what I teach inside the College Planning Mastery Program, and thats what this blog is here to help you with.

Understanding the Custodial Parent Rule

As of the current FAFSA guidelines, the custodial parent is the one responsible for completing the FAFSA. This doesnt always mean the parent with legal custody. Instead, FAFSA defines the custodial parent as:

The parent with whom the student lived the most during the past 12 months before the date of FAFSA submission.

If time were equally split, then the custodial parent is the one who provided the most financial support during that time.

Lets break that down.

Example 1: Uneven Living Arrangements

If your child lived with you 60% of the time and with their other parent 40%, you are considered the custodial parent, even if legal custody is shared.

Example 2: Equal Time Split

If your child spent exactly half the year with each parent, the custodial parent becomes the one who contributed more financially to your childs support.

This is where planning becomes important. If college is a few years away, this detail might influence how you structure time-sharing or financial contributions to set your student up for better aid eligibility.

Important FAFSA Updates You Should Know

FAFSA reform is ongoing. For students filing the FAFSA in 2024-2025 and beyond, the definition of custodial parent is shifting to reflect the parent who provides the most financial support, regardless of where the student lives.

This is a huge change.

If youre part of a divorced household, you must carefully consider how support is structured. The parent who offers more financial backing becomes the FAFSA parent. This makes understanding the flow of money, child support, gifts, in-kind help, housing, etc., even more critical in college planning.

Inside The College Planning Mastery Program, I walk families through this exact kind of situation and show them how to plan proactively rather than react after a missed opportunity.

What If the Custodial Parent Remarries?

Now heres another common curveball. If the custodial parent is remarried at the time of filing FAFSA, the stepparents financial information must also be reported.

This can sometimes drastically increase the household income on record, even if the stepparent isnt planning to contribute to college costs. Its a tricky situation and one that I help clients navigate all the time.

The good news is, we can often work around these challenges with careful financial positioning and early planning, especially if we start when the student is in 9th or 10th grade.

Why Your Choice of FAFSA Parent Matters So Much

Lets say one parent earns $150,000 a year and the other earns $60,000. Listing one over the other could mean the difference between:

• Qualifying for institutional need-based aid
  
  

• Receiving merit scholarships more easily
  
  

• Reducing or eliminating the need for parent PLUS loans
  
  

• Preserving your retirement accounts
  
  

This is not about choosing based on who wants to help or who deserves the opportunity. This is about leveraging current policy to give your child a fair shot at attending the best-fit college without putting your financial future in jeopardy.

Child Support and FAFSA Calculations

If you're receiving or paying child support, this will also factor into the FAFSA. For the custodial parent:

• Child support received is counted as untaxed income and must be reported.
  
  

• Child support paid by the non-custodial parent isnt counted against their income because their income isnt reported at all.
  
  

So if youre receiving substantial support, it could increase your FAFSA income and decrease aid eligibility. In this case, we look at other funding strategies, like college savings repositioning or CSS Profile planning for private institutions, to offset this.

Pro Tips for Divorced Families Navigating FAFSA

Ive worked with hundreds of families just like yours, and here are a few golden nuggets to keep in mind:

1. Plan Early
   Dont wait until senior year. The earlier we start mapping out your support structure and income flows, the more control we have over your outcome.
   
   

2. Keep Clear Documentation
   If your child lives primarily with one parent or receives more support from one household, document it. This can protect your eligibility if your aid is ever verified.
   
   

3. Coordinate Tax Returns
   Ideally, the FAFSA parent should also be the one claiming the child as a dependent, although it's not required. It just makes the financial picture cleaner.
   
   

4. Be Strategic with Stepparent Info
   If remarriage is on the horizon, understand how it could affect future aid eligibility. Ive helped many parents make timing decisions that save them tens of thousands in aid.
   
   

5. Dont Guess, Get Guidance
   This process is high-stakes, and small missteps can cost big money. Thats why I built The College Planning Mastery Program: to give you the tools, insights, and custom strategies your family needs to succeed.
   
   

When in Doubt, Talk It Out

Every family has a unique set of circumstances. Divorce adds a layer of complexity to college planning, but it doesnt have to mean missed opportunities or financial stress.

By choosing the right FAFSA parent and planning around FAFSA changes, remarriage, and support contributions, you can set your child up for maximum aid and set yourself up to avoid financial regret.

As a Certified College Funding Specialist (CCFS), Im not here to hand out generic advice. Im here to help you design a plan that protects your retirement, maximizes aid, and minimizes loans, all while making your childs college dreams come true.

If youre ready to bring clarity to your college funding strategy, lets talk. I offer a complimentary discovery call where well review your familys situation, discuss risks and opportunities, and explore whether working together is the right fit.

No pressure. Just clarity, compassion, and honest, proven strategies.

Schedule your complimentary consultation with me today, and lets make college affordable without sacrificing your peace of mind.