My girlfriend asked me to help her understand the FSFSA process for her daughter who will be entering college. I think I have researched and understand it well except for one concept I cannot get my head around and am hoping for help/validation.
Her ex-husband has a much higher income than she does and pays her a little bit of support each month. However, the student did spend incrementally more time (just a few days) with her mom than her dad over the past 12 months (this is an actual fact, not a decision made convenience) although they have a 50% custody agreement.
By the terms defined in the FSFSA guidelines for which parent’s financial information to use, since it wasn’t exactly 50/50, it seems like she is OK using her info, which would qualify the daughter for more aid. Although it seems clear than her husband provides more than half the support (almost 50% physical custody plus a monthly support check), this criteria would not come into the process unless the split of living time was exactly 50/50.
Because the ex husband lives in very close proximity, there would seemingly be not auditable information available by which a decision to use my girlfriends financial information on the report would be subject to challenge in an audit. They would seemingly need to take her word for it because there is no way, seemingly, that anyone could prove she didn’t spend incrementally more time with her mother during the past 12 months.
One thing did occur to me is that both parents probably file federal tax under Head of Household status, for which the criteria is that the dependent children are spend their time 50/50. Is it going to be an audit red flag if they are asked to provide income tax returns which show HOH filing status and this is now mildly inconsistent with what was stated on the FSFSA application.
The criteria for which parent’s financial info is used seems strange on this process and seemingly prone to abuse. I mean, what would prevent her from saying that her daughter spent even one more day over the last year living with her as opposed to her husband in order to qualify for aid? In our case it is true, but I could see many others tempted to game this out of convenience. This whole process seems like it would really get prone to abuse…it’s schocking.