How to Declare Your Independence for Student Financial Aid

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September is drawing closer, bringing a new school year, along with fresh worries over how to pay the steep cost of college tuition. For students hoping to get loans and scholarships, a lot rides on the Free Application for Federal Student Aid, or FAFSA. The Department of Education, state governments, and individual colleges use the form to determine what kinds of loans, grants, scholarships, and work-study opportunities a student can receive.

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.

Limited Options

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."

These overrides are only given in extreme circumstances, including abuse, parental imprisonment, student placement in foster care, and similar situations. Mayotte notes that the process of granting a dependency override may involve interviews with agency officials and clergy members to determine what a student's home life is like.

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 bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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Devon Arnett

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September 09 2013 at 10:07 AM Report abuse rate up rate down Reply
AL CONFER

Taxpayers responsibilty used to be from kindergarten to twelth grade, and then all of a sudden college was put on to the taxpayers backs and we all know how that is turning out. Now ittakes a college education to get what a student used to get in 12 grades in high school. All college loans did was allow colleges to give huge salarys to administrators and college teachers that are rediculous. It's NOT up to taxpayers to foot the bills when these college kids graduate and don't pay. Sorry, but I have to pay back any loan I take out and I get no breaks, what so ever. If parents had to co-sign college loans, we would see how long mom and dad would put up with their kids partying. Answer is simple, parents sign to co-pay or the kid gets a job, waits on tables or what ever it takes to pay for school. It's all about responsibility, on parnents and the kids.

July 22 2013 at 10:32 PM Report abuse rate up rate down Reply
impactvqi

and these students may qualify for unsubsidized Stafford loans, which at a higher interest rate then if the parents co-sign, so dependent or not the student has to pay more in the long run

July 22 2013 at 3:47 PM Report abuse rate up rate down Reply
Tetragnathid

Just wondering..does this in turn remove the "child" from the insurance provision allowing them to stay on the parnets insurance till they are 26 even though they no longer a legal dependent?

July 22 2013 at 12:22 PM Report abuse rate up rate down Reply
dnailes

Even state universities can be overpriced if one choses to go to an out of state uni or has to because of their major choice. University of Pennsylvania's total cost of attending the uni for an out of state student is over $59,000! and in order to go to a uni as a commuter student, one has to live near the school, not always a possibility for all students.

July 22 2013 at 11:28 AM Report abuse +1 rate up rate down Reply
1 reply to dnailes's comment
sam59USN

Correct, the tally for two Finance degrees at a State college, sharing an apartment, $128,000 for our sons.

July 22 2013 at 4:29 PM Report abuse rate up rate down Reply