Question: My daughter is about to fill out the FAFSA. Her mother and I are divorced. Mom's yearly income is higher than mine. Mom has been claiming her as a dependent on her tax returns (while I've been claiming our son). Will red flags be raised if my daughter lists me as the primary provider for financial aid determination?

When parents are divorced, the custodial parent must be listed on the FAFSA. If you and your ex-wife share custody of your daughter, the FAFSA should be completed by the parent with whom the child spends the most time. When the incomes are skewed ... as in your case ... then it makes sense for your daughter to indicate that she spends at least 51% of her time with you, regardless of who claims her as a dependent. (Of course, if you don't live reasonably close to where your daughter goes to high school, then she can't realistically make this claim.)

Colleges that require only the FAFSA form will consider just the income of the custodial parent (and of that parent’s spouse—the step-parent, if there is one) when making financial-aid determinations. But, if your daughter is applying to colleges that require the CSS Profile form, it won't matter who is listed as the custodial parent since financial aid officers will consider the income of both parents.

Good luck to you as you wade into these shark-filled waters!

(posted 1/3/2011)