Many factors come into play when determining financial aid for any family. Key to the financial health of the divorced or separated mom with a college or college-bound student is the designation of “custodial” parent. She is the parent who will receive the financial aid package and the student's bill.

One of financial aid's best kept secrets is the opportunity that arises when parents are separated or divorced and there is a substantial difference on their balance sheets. When completing financial aid applications, only the designated custodial parent's income and assets must be listed. Thus, the designation of custodial parent ultimately determines financial aid eligibility.

Any family can legally take advantage of this situation, but first parents must fully understand who the custodial parent is or isn't and why. During the high school and college years, many are surprised to learn that this designation is not necessarily the same as stipulated by the court in the divorce hearing.

The Custodial Parent:

During the high school years, the custodial parent is the one with whom the student spent more than half their time over the previous twelve months.

During the college years, if the student lives on or off campus, either parent can qualify as custodial parent as long as the student is able to substantiate residency at that parent's address. This can be accomplished with proof that their mail is received there, and a phone in their name is also recommended.

If the student commutes to college and both parents live within driving distance, then either parent can be the custodial parent.

The “Unambiguous” Non-custodial Parent is the parent that does not meet the above criteria:

During high school, the parent living outside the boundaries of the school district is the unambiguous non-custodial parent. However, after graduation, the student could relocate, thereby giving custodial status to this parent.

If the student commutes while attending college, then the unambiguous non-custodial parent is that parent who lives too far from campus for the student to travel from.

The “Ambiguous” Non-custodial Parent Strategy™

Either parent can be the ambiguous non-custodial parent during high school given that both live in the same school district if the student attends a public school, or when both parents live within driving distance of a private school. Either parent can be the ambiguous non-custodial parent if the student attends a boarding school.

During college, if the student lives on or off campus, then either parent can be the ambiguous non-custodial parent as long as the student can substantiate residency as previously described. If the student commutes to college and both parents live within driving distance, then either parent can be designated the ambiguous non-custodial parent.

The Ambiguous Non-custodial Parent Strategy™ comes into play when one parent's income and assets far exceed the other's, as the less affluent parent would have a much greater financial need and therefore qualify for more financial aid. Separated or divorced moms who share the same address defeat this strategy making it near impossible to work!