How to Declare Your Independence for Student Financial Aid
When it comes to funding college, the question of parental contribution can be a big snag. Based on assets and income, the FAFSA determines how much parents can be expected to spend putting their child through college. Of course, that assessment assumes that parents are ready, willing and able to give their children money to help with school, but -- as many students have found -- there can be a huge gap between the amount of money that a parent "can" give on paper and the amount of money that he or she is willing to part with.
For students facing problems with parental contributions, declaring financial independence is the holy grail: if a student can financially separate from his or her parents, their assets won't be factored into the tuition equation. For most students -- Lindsay Lohan being a likely exception -- this would likely drop their apparent wealth significantly, increasing their eligibility for loans and grants.
Unfortunately, most of the grounds under which a young person can be granted financial independence -- including being at least 24 years old, being in graduate school, being an orphan or ward of the state, being a military veteran, being homeless, having dependents, or being an emancipated minor -- are nonnegotiable, and a student can't do much to change his or her status.
Other options -- like being in the military, being married, or being homeless -- are more open to individual action, but would require a serious, long-term commitment and should not be entered into lightly. To put it mildly, joining the military, having a child, or getting married are big decisions, and shouldn't be undertaken solely for the purpose of getting student loans.
(That having been said, when I was growing up, I knew parents who had gotten married or even had children in order to avoid deployment to Vietnam. Given the high cost of college, and the amazing impact that a college degree could have on future earnings, I'm not sure I can automatically discount the wisdom of marrying one's high school sweetheart as a strategy for getting student aid.)
How Unusual Is Your Situation?
There is also one method for which the requirements are not so well-defined: a college financial aid administrator can make a documented determination of independence by reason of "other unusual circumstances." But, while this may seem like a great wild card, it's actually more of a dead-end. As Betsy Mayette, director of regulatory compliance for American Student Assistance, points out, it's rare for a student to successfully make the case for that status: "In general, less than one half of one percent of students get a dependency override every year."
Proving homelessness is similarly complicated. Mayotte points out that, to do so, a financial aid officer might follow the case through child protective services, the national center for homeless education, or other federal, state or local organizations that assist the homeless.
In some cases, Mayotte notes, a financial aid officer can make a judgment call: "if there's no other documentation of a student's status, a financial aid officer can still determine that the student meets this definition." However, she notes, "it is extremely rare that they would do so without some sort of outside verification."
This isn't to say that a student with unsupportive parents doesn't have any recourse. Up until a few years ago, students whose parents were unwilling to fill out the FAFSA didn't have any other options. Recently, however, there has been a rule change, and these students may qualify for unsubsidized Stafford loans. While not as attractive as Pell grants and subsidized Staffords, this is still an option -- and it could make a huge difference for students trying to make their way through school.
Bruce Watson is DailyFinance's Savings editor. You can reach him by e-mail at email@example.com, or follow him on Twitter at @bruce1971.