To apply for most financial aid, including federal and state grants, loans and work-study, college students and their parents need to complete the Free Application for Federal Student Aid (FAFSA®). The office of Federal Student Aid of the U.S. Department of Education administers the FAFSA and they offer more than $120 billion each year to help students pay for higher education.
Although completing the FAFSA is technically the student's responsibility, parents play a large role if the student is considered a dependent. Being a dependent on a parent's tax return does not affect dependency status for the FAFSA. Even a financially self-sufficient young adult that files their own tax return can still be considered a dependent student. Here's what parents and students need to know about FAFSA dependency status.
Who is Considered a Dependent?
The FAFSA asks a series of 10 questions to determine whether the student is dependent or independent. These include age, marital status and the level of education being pursued. It also asks about military service, children and other dependents, emancipation and if the student's parents are deceased. If one or more questions are answered with a yes, the student is considered an independent student. If every question is answered with a no, the student is dependent and must provide information about their parents on the FAFSA.
Undergraduate students who are under the age of 24 are generally considered dependent unless they satisfy other criteria. Some medical and law school students, however, may be required to provide parent information regardless of dependency status.
The student's dependency status can affect the amount and types of financial aid available. In most cases, independent students will qualify for more financial aid since their parents' financial information is not taken into account.
Many parents are familiar with IRS rules for claiming a child as a dependent, but the dependency rules for FAFSA purposes are different. Parents cannot opt out of claiming their child as a dependent on their tax return to get a larger financial aid package. A student may be considered independent for tax purposes, but not for financial aid.
A dependent student must provide information about their own finances and for their parents', such as bank account balances, the value of any investment accounts and taxable income (such as wages and interest income). Independent students report only their own information.
Which Parent to Report?
If the student's parents are married or unmarried yet still living together, use the financial information for both parents on the FAFSA. If the parents are divorced or separated and living apart, provide information on the parent that the student lived with the most during the past 12 months. If the child splits time equally between two households, the parent who provided the most financial support during the last 12 months will need to include their information on the FAFSA.
Some divorce decrees allow one parent to claim the child as a dependent for tax purposes, even though the child lived with the other parent most of the year. For financial aid purposes, who the child lives with matters.
Unable to Provide Parent Information?
For a variety of reasons, parents occasionally refuse to provide information to complete the FAFSA, but this does not mean the student is an independent. Students should check the box on the FAFSA that says they don't have access to their parents' information, and talk with the financial aid office about their options. There are special circumstances that schools take into consideration, such as incarcerated parents or students who left home because of an abusive situation.
Need more help in determining whether you are a dependent student and which parent's information you'll need to report on the FAFSA? Answer a few questions in this interactive FAFSA assistant to help you get ready to complete the application.
FAFSA is a registered service mark of the U.S. Department of Education and is not affiliated with Discover Student Loans.