July 20, 2018
Financing a college education can be costly and confusing — and often even more so when a student's parents are divorced. So here are some points to keep in mind as you wade into this quagmire:
- If your son is applying to colleges that use the CSS Profile Form (or their own similar one) -- which means primarily private colleges -- admission officials will look at both your income and assets as well as his mother's. (See the CSS Profile list here.)
- If your son is applying to colleges that require only the FAFSA form, they will consider just his custodial parent's information ... i.e., his mother's. (If, however, she has remarried, then the stepparent's data will be in the mix as well.)
- Due to his mom's precarious financial situation, it sounds like your son will qualify for a lot of “need-based" financial aid at the FAFSA-only colleges. However, that doesn't mean that he will necessarily get it. The colleges that typically offer the best need-based aid are also those that consider information from both the custodial and non-custodial parents. Thus, if you are on more solid financial footing that your ex is, your son may not be eligible for lots of need-based aid.
1. Aim your son toward public colleges in his home state, to public colleges in nearby states that have reciprocity with his (his guidance counselor should have a list) and/or to colleges where he is likely to qualify for “merit aid," which is grant money that isn't tied to family financial figures. Some colleges (especially the snazziest ones) offer only need-based aid. But many colleges (including some very selective popular schools like USC, Emory, Notre Dame, Tulane, etc.) use merit money to lure their most sought-after candidates. If your son is a very strong student with top test scores (SAT or ACT), his chances of landing merit money are promising. If he is a so-so student, there are still colleges that will offer him merit money, but he might do better at a public institution. In other words, if a not-especially-selective private college were to give your son a merit award of $20,000 per year, that might sound great at first glance. But if the cost of attendance at that college is, say, $50,000 per year, then your son would probably be wise to elect a less pricey public college, which should be less than the balance of the private school cost and may draw more gifted students and provide broader opportunities.
2. If your son is a strong student, you may find that even the colleges that use the Profile form (and thus consider your income and assets and not just the mom's), will provide more generous financial aid than you anticipate. Every college is now required to post a “Net Price Calculator" online that can help families estimate how much a college will cost. Although sometimes the NPC results must be taken with a block of salt (and this is especially true in cases where the finances are not straightforward, like in your situation), you can at least get a ballpark sense of whether a school that considers both parents' numbers will be in range for your son. As a general rule of thumb, the more prestigious a college is, the more money there is to give away. (You said that your ex didn't file taxes in 2016, but I'm assuming she has 2017 tax form to draw on when she plays with the NPC. True?)
3. As a non-custodial parent you can take out a “Parent PLUS Loan." You can borrow up to the full cost of attendance (although it sounds like you don't want to assume that much debt). Even if your wife's credit is bad, you could procure the loan yourself. Another option would be for her to apply for the Parent PLUS loan. If she is turned down (which seems likely, based on what you've said), your son will then be able to borrow money in his own name. There are limits on loans made directly to students but these limits are somewhat higher for a student whose parent tried for a PLUS loan but was denied.
4. Your son can apply for “outside scholarships" such as those he can identify by using free online services such as www.fastweb.com. Outside scholarships are sponsored by civic organizations, private companies and foundations, religious groups, etc. However, the best money almost always comes from the colleges themselves, and most students can't look to outside grants to fill big holes in their college fund coffers.
If your son already has some colleges in mind that he'd like to attend, a good place to start would be with their Net Price Calculators to try and figure out what might be within reach for all of you. Maybe there will be some good surprises.
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