Follow Brett Linkedin Facebook
Email Brett Email
Financial
Jul 6, 2018

How a Divorce Can Impact Your College Planning

Sponsored Content provided by Brett Tushingham - CFP®, CCFS®, Managing Member & CCO, Tushingham Wealth Strategies

A divorce or separation can have a dramatic impact on your child’s eligibility for financial aid, and here’s why – some colleges will only consider the income and assets of the custodial parent, while others will include both the custodial and non-custodial parents. 

Since increased assets and income will increase your Expected Family Contribution, or EFC, it’s important to plan ahead before applying to schools. 


Custodial Parent

So, who is the custodial parent? 

The custodial parent is defined as:
  • The parent with whom the child lived the most during the previous 12 months. 
  • If both parents had equal custody, then the custodial parent is the one who provided the most financial support during the past 12 months


College Application – FAFSA vs CSS

Once you determine the custodial parent, the next question is which aid application the college will require. If the college requires just the FAFSA, then only include the custodial parent’s income and asset information on the application, along with any child support received.  This could result in substantially more need-based financial aid if the custodial parent is the parent with a lower income.  

If the college also requires the CSS Profile, then most likely both parents’ financials will be required – custodial and non-custodial parent. The result can be thousands of dollars in aid at one school and absolutely nothing at another.     

Remarriage  

If the custodial parent ends up remarrying as of the date the FAFSA is filed, then the income and assets of the step-parent must be reported, as well. This is regardless of what a prenuptial agreement might say.  Other factors, such as the number of children in college at once, can impact your eligibility for aid, so talk with someone familiar with the aid process when putting a college plan together.  

I’ve been a financial planner for almost 15 years and I’m still amazed at the lack of advice people are receiving from their financial advisors when it comes to paying for college. Understanding divorce and its impact on financial aid is just one example of this. 

Some families will invest close to $300,000 in their child’s education and substantially more if they have more children or obtain advanced degrees. Proactive college planning is a must if you want to save money on college, protect your retirement assets, and help your children graduate with minimal student loans. Start planning now!

PLEASE CLICK TO WATCH MY VIDEO ON COLLEGE SAVINGS PLANS 



At Tushingham Wealth Strategies, our goal is to help you proactively oversee all of your financial affairs by serving as your “Personal CFO” and fiduciary, so that you may live your ideal life worry free. As part of our "Personal CFO" service we help families develop "late stage" college planning strategies so that they can save money on college, protect their retirement assets and help their children graduate with minimal student loans. This is why our “Personal CFO” services will help you integrate college and retirement planning into one strategy.

Tws logo reverse bluebkgd
Ico insights

INSIGHTS

SPONSORS' CONTENT
Hardy revised

Preparing Future Leaders Through Simulation

Charles Hardy - UNCW College of Health and Human Services
Michaelhiggins 41019104338

An Undersea Tribute to Life

Michael Higgins - Dignity Memorial
Jasonpathfinder3

Reducing Longevity Risk in Retirement

Jason Wheeler - Pathfinder Wealth Consulting

Trending News

River Place Developer Proposes $90M Downtown Gateway Project

Christina Haley O'Neal - Sep 19, 2019

Embattled Country Club Aims To Continue Operating After Bankruptcy Filing

Johanna Cano - Sep 20, 2019

Building Leased To NHRMC Sells For More Than $5.8M

Cece Nunn - Sep 19, 2019

Banking On History

Jenny Callison - Sep 20, 2019

Downtown Apartment Units On The Rise

Cece Nunn - Sep 20, 2019

In The Current Issue

One Chef, 3 Restaurants At Roudabush

Farm-to-table expert and San Francisco transplant Erin Wiley is the executive chef at not one but three of downtown Wilmington’s most freque...


Museum Bounces Back After Flo Repairs

The Cape Fear Museum of History and Science is fully functional once again, nearly a year after sustaining damages from Hurricane Florence....


Startup Automates Workflow

A Wilmington company has developed a cloud-based application for small businesses that manages client information, invoicing, documents, ema...

Book On Business

The 2019 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

August 26, 2019 Power Breakfast: A Healthy Sale?
WILMA's Leadership Accelerator
2019 WilmingtonBiz Expo Keynote Lunch - CEO, nCino, Pierre Naude`