How will getting remarried affect my child's financial aid?

Amy Fontinelle

By Amy Fontinelle
Amy Fontinelle is a personal finance writer focusing on budgeting, credit cards, mortgages, real estate, investing, and other topics.
Posted on Sep 12, 2022

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Describe how the FAFSA weighs remarriage in calculating aid for the 2023–24 and 2024–25 school years.

Demonstrate the importance of reevaluating college financial planning when your family structure changes.

Explain differences between the FAFSA and CSS Profile when it comes to remarriage.
 
     

A parent’s remarriage can increase or decrease a student’s college financial aid eligibility, and in ways that will differ in the 2023–24 and 2024–25 academic years thanks to changes in the Free Application for Federal Student Aid, better known as the FAFSA.

If you are divorced or widowed but recently remarried — or thinking about getting remarried — money for college could be at stake. The household financial adjustments that come with tying the knot might affect how much the government and colleges will expect you to contribute toward your child’s tuition and fees.

How the FAFSA looks at remarried parents

The federal government and most schools rely on the information your child submits through the FAFSA to decide how much financial aid — loans, grants, and scholarships — your child needs to attend college. The FAFSA is only concerned with the income and assets of the custodial parent’s household. Its definitions of parent and household might not be what you think, however. (Related: Big changes for the FAFSA)

For one, FAFSA does not define “custodial parent” as the parent who has legal custody. For the 2023–24 academic year, it’s the main parent the child lives with.

As of the 2024–25 academic year, the FAFSA definition of “custodial parent” will change because of the FAFSA Simplification Act. Congress passed this act near the end of 2020. It’s being implemented over time, giving parents more time to learn about the changes and plan accordingly.

But the next two years may feel extra rocky. Even though the FAFSA that comes out Oct. 1, 2023, may be easier to fill out because it will allow families to import their tax return data directly from the IRS, the underlying changes could create swings in students’ out-of-pocket college costs.

“Instead of the parent that the student lived with most often during the year, the custodial parent will be the one who provided the most financial support to the student during that time,” said Joshua Lachs, CEO of Moneythink, a national nonprofit focused on increasing college graduation rates and reducing student loan debt.

Another important consideration that applies to both academic years: “If the custodial parent has remarried as of the date the FAFSA is filed, the income and assets of the stepparent must be reported, regardless of any prenuptial agreements, even if they were not married during the tax year under consideration,” Lachs said. “This could alter the student’s total financial aid eligibility.”

But if the student’s noncustodial parent has remarried, it has no effect on the FAFSA, which only collects data related to the custodial parent, said Certified Financial Planner™ professional DeDe M. Jones, managing director of Innovative Financial in Lakewood, Colorado.

If a student’s custodial parent is thinking about getting remarried but hasn’t gone through with it yet, it’s worth assessing how remarriage could help or hurt the student’s financial aid package.

You might start by using an expected family contribution calculator. But for complex situations like remarriage or potential remarriage, it may be best to talk to someone who specializes in helping families with financial aid planning. (Related: Need financial advice? Contact us)

How remarriage can hurt financial aid

As Lachs noted, FAFSA ignores prenuptial agreements, so even if a custodial parent and stepparent have agreed that the stepparent will not be responsible for the custodial parent’s child’s college bills, the stepparent’s income and assets will still be factored into the student’s financial aid award.

Suppose the stepparent isn’t going to contribute to the child’s university bills despite having the financial resources to do so, perhaps because he or she has biological children to provide for. It might make sense to postpone remarriage to avoid hurting the student’s chances of financial aid.

Of course, such a decision has to be carefully weighed against the tax, legal, and social costs and benefits of marriage. It’s complicated enough that many people don’t even want to think about it, and understandably prefer to base their marriage decisions on emotional factors. (Related: Protecting your finances in a second marriage)

It’s worth knowing, though, that a child’s custodial parent can live with a partner without having to report that partner’s income or assets for FAFSA purposes — unless that partner has legally adopted the child.

It could make financial sense to hold off on remarriage if a child won’t be able to attend college (or attend their college of choice) without receiving significant financial aid. It’s especially important for middle-income families to plan carefully since the asset protection allowance will drop to zero for all parents, single or married, starting with the 2023–24 academic year and the FAFSA that’s available starting Oct. 1, 2022.

This change, a result of Congress failing to act, has substantially reduced the amount of aid families qualify for over the last decade and a half, according to college financial aid expert Mark Kantrowitz. It assumes parents can contribute the same or increasingly more toward a child’s college expenses while it has actually become harder to pay for college. (Know your need: College savings calculator)

Any financial support that another adult provides to the student must be listed as untaxed income to the student on the 2023-24 FAFSA. If the future stepparent supports the child financially, this financial support will reduce the aid the student is eligible for because the FAFSA expects 50 percent of a student’s income to go toward college expenses. But this support won’t count as income to the student on the 2024-25 FAFSA.

How remarriage can help with financial aid

The obvious way remarriage can help with financial aid is if your new spouse is willing and able to help pay for your child’s college education. This contribution is not government or college aid, of course, and it may lower the financial aid eligibility of your new combined household, but it can still help get the tuition bills paid.

The less obvious way?

“Remarriage for the custodial parent can be helpful when, on balance, the new family has greater obligations relative to their assets and incomes as compared to the formerly single parent,” Jones said. (Related: Blended family budgeting and finances)

If the stepparent has a lower income than the custodial parent, already has a child in college, claims dependents on their income tax return, or was financially wiped out by their own divorce, a student might qualify for more aid after their custodial parent remarries. (Note: The 2024–25 FAFSA will calculate household size differently, which may again change aid eligibility for better or worse.)

Expensive medical bills within the family, a drop in the amount of child support received (or increase in the amount paid), decreased income from a layoff or disability, or even retirement may also increase aid. But starting with the 2024–25 FAFSA, families with one child in college will be treated the same as families with multiple children in college. (Related: FAFSA changes could double some family college costs: Are you ready?)

How school and federal financial aid formulas differ regarding remarriage

Some schools look beyond FAFSA and have their own formulas for deciding how much aid each family receives.

There are 249 schools and scholarship programs that use a form called CSS PROFILE (CSS stands for College Scholarship Service). In contrast to the FAFSA, some of these schools and programs require financial aid applicants to disclose the noncustodial parent’s finances. If your child is applying to one of these, you may want to find out how it will consider your marital status when making its financial aid decisions.

Schools that use the CSS Profile take a more holistic look at a family’s finances and use greater discretion when awarding aid, Jones said, and how a custodial or noncustodial parent’s remarriage affects financial aid at these schools depends on the situation. More resources may result in less aid, while more obligations (such as more dependents or more dependents in college) may result in a larger award.

Considering a targeted approach to college applications

In some situations, it might make sense to only or primarily apply to schools that do not request the noncustodial parent’s financial information.

For example, suppose the noncustodial parent, who has a modest income and assets, gets remarried to someone with ample resources. However, the new spouse, quite understandably, does not want to pay to send someone else’s child — perhaps a child the new spouse barely has a relationship with — to college. A school that expects those resources to go toward the child’s tuition will likely offer a lower financial aid award than a school that only looks at the custodial parent’s assets or that doesn’t factor in a stepparent’s assets.

But you never know for sure how much aid you will receive from a particular college or university until you apply, so it may be worth applying to schools even if they seem unlikely to award enough aid—especially if your child qualifies for an application fee waiver. Explaining the situation to students before they apply can help temper expectations. (Related: Choosing the right college)

If your child has no contact with their noncustodial parent, completing the CSS Profile Waiver Request for the Noncustodial Parent (or a school-specific form) can help. A school may agree not to consider the noncustodial parent’s financial information if you can show that the noncustodial parent has abused you or your child, has been legally limited from contacting your child, or has a history of failure to provide child support.

Conclusion

So, will getting married affect my child’s financial aid for college?

As seen, financial aid rules can be hard to make sense of no matter what your family background. Divorce or widowhood and subsequent remarriage, combined with FAFSA changes, don’t make college financial aid planning any easier. However, learning how remarriage could affect your child’s financial aid eligibility can help you avoid ugly surprises and plan accordingly.

Learn more from MassMutual…

Divorce and college aid

Financial tips for women in divorce

How money can wreck your marriage

This article was published in February 2018. It has been updated.

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The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own and do not necessarily represent the views of Massachusetts Mutual Life Insurance Company.