I have been a divorced dad for 13 years and my income has been lower than my ex wife. I am the parent contributor for FAFSA (based on my lower income) and my ex has never contributed to the 529 account for our son.
For the past school year, the grant funds helped lower the overall fees for both of us. Am I legally obligated to allow her to benefit from grant funds?
Please read this information:
1 Like
As per the link above, do you provide more than half your kid’s financial support? If so then you should be the FAFSA contributor, and it’s irrelevant if you make less than your wife.
I’m kind of confused. The Pell grant goes to the student, so the parents aren’t sharing it. If you are asking about the 529 plan and whether you have to give the entire thing to your student so that the ex doesn’t have to pay 1/2 the tuition (or whatever your agreement is), that would depend on who the owner of the 529 is. Is it you? then you can distribute or not distribute as you like. Is it the student? Then the student would decide on distribution.
1 Like
I appreciate the reply. My ex wife benefits from me being the parent contributor (based on my lower income). she doesn’t get the funds directly, but the grant dollars does lower the amount she pays. So for example…if I get a $8,000 grant, It lowers my portion of the tuition $4k and her portion $4k. Am I obligated to split that is my question.
Again, it is your child’s grant, and your child is benefiting.
You have no obligation to pay anything for your child’s education, unless you agreed to it in the divorce. How you split costs is up to you or your divorce decree. If it says you will split costs evenly, I’d say those are costs after all grants and scholarship. If your child’s cost of attendance is $50k, and student gets $8k in pell grants and $10k in need based aid from the school (or other scholarship), I think you’d take $50k less $8k, less $10 for a final bill of $32k (to be split or covered by your child with loans or work). Remember there is also an ATOC tax benefit that can be allocated, and perhaps other tax benefits that may or may not have been assigned at divorce.
I get you are arguing that the Pell grant should be in your contribution because your tax info secured the award, but it is your child’s award not yours.
1 Like
What does your divorce decree say?
You could argue (which i guess is what you are trying to do) that you should be allowed to cover your share with your kid’s Pell grant, and she should pay her share out of pocket. So unless that’s expressly NOT what is in the divorce papers and how you negotiated paying for college, that could be one way to approach it.
Be prepared for pushback, however. You start down the slippery slope of “kid earned 3K over summer. Is that going towards Mom’s share or Dad’s share?” or “Grandma bought the kid a laptop. Does that reduce Mom’s payment since it’s her mother?” Etc.
Are you getting some type of spousal support as the partner with the lower income?
1 Like
I would just caution that you are only the FAFSA contributor if you provide more than 50% of your child’s support. If you do not, your ex should be the contributor (by law).
2 Likes
The parent who contributes the MOST toward the support of the college student is the parent listed on the FAFSA. Usually, this is the parent with the higher income, not the lower one.
And it doesn’t matter where the student resides.
Are you sure you are considered the custodial parent for FAFSA purposes?
Not always. If the student lives more with one parent, it’s likely that parent picks up more of the day to day charges that do add up. Also the parent with a higher income may not be very good about paying child support.
It’s certainly possible that the parent who earns less could be the one who provides the most monetary support. Without knowledge otherwise, I will assume that this parent does provide more than 50% of the student’s support. My response to the question of whether the Pell must benefit the other parent is that this has absolutely nothing to do with financial aid. It’s a question for the lawyers to decide, based on the terms of their particular divorce decree.
2 Likes