The Financial Benefit Of Divorce: Saving $$$$$ On The Cost Of College!!

Going through a separation and divorce is both emotionally and financially draining for all parties involved!  Even in the best divorces, you are still dividing assets and now the two parents have to support two households on the same total income as when everyone lived harmoniously together.

In many instances, one parent earns significantly more than the other parent.  While the lower income spouse should make every effort to live the best life possible by increasing both his or her income as well as savings, there is a great financial benefit that comes along with divorce when the children are preparing to enter or are already in college!

In the case of divorce, specifically for purposes of financial savings on the cost of college, the custodial parent should be the parent who earns less.  (Of course, there may be other reasons for the parent who earns more money to be named as the custodial parent.)  Even if there is 50/50 joint custody, there are still 365 days in a year so the custodial parent will be the parent with whom the child lives with more often.   As long as the custodial parent does not remarry, only the custodial parent’s income will be included as total household income (as long as both parents live in two separate residences.)

​Separated and divorced parents will likely find the largest benefit in terms of college savings will come from those schools which only want the Free Application for Federal Student Aid (FAFSA).  Schools which ask for the CSS Profile financial aid application in addition to FAFSA, tend to also ask for the Non-Custodial Parent’s financial information as well so that the school is able to see the total available resources available to support the child heading off to college.  It is important to be strategic, especially when looking to contain costs, in which schools to apply to.  As the Founder of College Financial Prep, where my work primarily focuses on separated, divorced and widowed clients, I always suggest that the college search has to begin Junior year in high school.  It is important to plan ahead with choosing colleges in order to maximize savings!

During Senior year of high school is when the FAFSA and CSS Profile financial aid forms become available.  So, if you have a child graduating high school in June 2021, your 2019 tax information will be used on your financial aid forms.  This is when things get fun!  When did you separate?  When did you divorce?  How were your taxes filed on your tax return? Were you still married at the time?

Many clients who are dealing with separation, divorce or other extenuating circumstances are very upset about the original income that is used by FAFSA because it is not a true reflection on their household situation now.  These are all issues that I commonly handle and get revised so as to lower the custodial parent’s Expected Family Contribution (EFC) and thus ideally increase the amount of aid that the child receives for college.

Here’s a case in point.  One custodial parent whom I recently worked with has three children and a lower income.  She is separated for about one year now.  Her oldest child will be a senior in college next year, one will be a junior in college next year and her youngest will be an incoming freshman.  I was able to help this family reduce their costs for both this year (since they had not previously filed a FAFSA form) and next year due to 1. The separation; 2. The low income level; 3. Multiple children in college; 4. Secure state scholarships that they didn’t know they were eligible for.  This family, with two children attending in state universities and one at a private school has now effectively reduced their payments by $50,000 per year just for next year!!!  The total four year savings for each child will be much larger!

So while the parents are separated and, in this instance, they only looked at the custodial parent’s income, the savings to both parents is enormous over four years of college since both parents are sharing in the cost of college for their children!!

In another instance, I worked with a custodial Dad.  Both him and his child decided to do their FAFSA form.  Unfortunately it was filled out incorrectly.  They included some resources as assets that should have been excluded on their FAFSA form..  College Financial Prep was able to reduce this family’s EFC by $17,000 and get free tuition for his daughter.  Another huge savings for this family! 

The last case I will share is that of a single parent where there was also an enormous change in finances.  Similar to the situations above, College Financial Prep was able to secure both need and merit based aid for the child totalling $39,000 for freshman year!

So, while the process of going through a divorce is certainly life altering and usually financially draining, there are ways to positively move forward when planning to send the children to college.  Do not automatically assume that student loans will be needed.  The mission at College Financial Prep is to help families save money on the cost of college!

Vicki Vollweiler, Founder of College Financial Prep, enjoys helping families save money!  She has her MBA degree, is a certified divorce coach and is also a divorced mom of two children.  Her son plans to finish his undergraduate degree next year and pursue a Ph.D. in Psychology while her daughter is an active middle schooler involved in band and cheerleading.  Vicki can be reached at www.CollegeFinancialPrep.com or by phone at 516-225-5224.  You may LIKE College Financial Prep on Facebook to learn more at www.Facebook.com/CollegeFinancialPrep.

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