Child Support to Become an Asset
The amount reported will be for the most recently completed calendar year as of the date the FAFSA is filed.
A note about an upcoming change for the 2024-2025 award year: The way child support received will be reported can create different years to review for different students within the same award year. Here are details.
By Rick Cox
Up through the 2023-2024 award year, child support received has been treated as untaxed income when calculating the EFC. Additionally, it’s based on the amount received for the applicable tax year. For example, 2023-2024 uses income for 2021. The student or parent would answer the child support question on the FAFSA with the amount received in 2021.
Beginning with the 2024-2025 award year, it will be treated as an asset in the SAI calculation. The applicant or parent will report the amount received for the most recently completed calendar year as of the date the FAFSA was filed. This can create different years to review for different students within the same award year.
- For example, if a student completes the 2024-2025 FAFSA in December of 2023, the amount of child support received will be for the year 2022. However, a different student completing the 2024-2025 FAFSA in January of 2024 will report the child support received for the year 2023.
A related change for 2024-2025: which parent to use on the FAFSA if the student’s parents are divorced.
- Through 2023-2024, the appropriate parent to use was the one with whom the student lived with most during the previous 12 months. In 2024-2025, it will be the parent who provides the most financial support. The parent who provides the most support will be the contributor the student invites to complete the parent’s portion of their FAFSA.
- This change created the question of which parent to use when child support is paid by one parent to the other parent. If a student’s parent is paying child support, who is considered the parent providing the most financial support – the one paying the child support (a non-custodial parent) or the one using those funds to support the child (custodial parent)? The Department of Education has clarified that the support is considered to come from the parent who is paying the child support.
- If the child support paid, plus any additional financial support, is more than half the student’s support, the non-custodial parent would be the appropriate person to use on the FAFSA. However, if that support is less than half of the student’s support and the custodial parent is providing the most support (without counting the child support), the custodial parent is the appropriate parent to complete the FAFSA.
- For example, it’s estimated that the cost of supporting the student equals $1,000 per month. The father (non-custodial parent) pays the mother $600 per month in child support. He is providing more than half of the support of the student and, therefore, he is the appropriate parent contributor for the FAFSA. If the father paid $400 per month and did not provide any other financial support, he’s paying less than half of the student’s support. The mother is paying more than half of the student’s support and, therefore, the mother is the appropriate parent contributor for the FAFSA.
Rick Cox is Global’s Executive Director of Regulatory Affairs and Compliance