However, the Free Application for Federal Student Aid (FAFSA) process can be confusing – particularly in a situation where a prospective student’s parents are no longer together.
“Having parents that are separated or divorced complicates the FAFSA and financial aid application process in general for many students,” Andrew Pentis of Student Loan Hero told FOX Business. “In many cases, students aren't sure about whether mom or dad is the right person to help them complete the forms and supply the right tax documents.”
According to data from the American Psychological Association, 40 percent to 50 percent of married couples in the U.S. divorce, meaning many prospective college students may have to deal with additional confusion when filling out financial aid forms.
The first question that can trip students up when their parents don’t live together is which parent should fill out the forms.
“The parent with custody of the student should fill out the FAFSA," Pentis said. "In the words of the Department of Education, the custodial parent is the one that the student lived with for the majority of the year before filing the FAFSA. If the student spent equal time with each parent, the parent that provided the most financial support over the past 12 months should be the one to complete the FAFSA.”
Pentis added that if parents are separated – but live together – they can both assist with the forms.
In the event that one parent gets remarried, if it is the custodial parent, his or her new spouse’s information needs to be reported. However, Pentis said, in this situation the student still fills out the education level of their biological or adoptive parents, not the stepparent.
Divorce can also present families with opportunities to get creative when it comes to claiming educational tax credits, including paying for college tuition.
“Only one parent can claim the child on their tax returns, but it doesn't have to be the same parent who completed the FAFSA — IRS regulations and FAFSA rules aren't identical,” Pentis said.
As previously reported by FOX Business, the biggest mistake people make during the financial aid process is failing to apply. The main reasons families don’t apply is because they either find it difficult to fill out the application and/or they assume they won’t qualify.
But experts have said there’s a good chance families will qualify, and failing to apply may cause them to miss out on thousands of dollars.
High school graduates forewent $2.7 billion in free federal grant money in 2014, including 747,579 people who were likely eligible for a Pell grant. The average amount of money that students who did not apply were found to have missed out on was $1,861.
If students have any questions about the process, they can ask high school or college guidance counselors, Pentis said.
The FAFSA open date was Oct. 1 and the federal deadline is June 30.
Each college may have its own FAFSA deadline – and each state has its own deadline. But people should apply as soon as possible because funds can be available on a first-come, first-served basis.