Financial aid and your dependent student

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Q. Would making my 18-year-old an independent person – instead of one of my dependents – help with financial aid for college?
— Mom

A. Independent students would probably qualify for more financial aid than would dependent students of parents with a fair amount of wealth and income.

But, of course, it’s not that simple.

Neither is the process of making a child an “independent” person.

Dependency status for federal student aid purposes is not the same as dependency status for federal income tax purposes, said Jim McCarthy, a certified financial planner with Directional Wealth Management in Rockaway.

“Students cannot qualify as independent merely by claiming themselves as an exemption on their own federal income tax returns, not even if they no longer live with, or are supported by, their parents,” McCarthy said.

McCarthy said federal student aid programs are based on the concept that it is primarily the student and the student’s family responsibility to pay for the student’s education.

And, he said, there is a statutory definition that determines which students are considered independent. Any student who is not independent under the statutory definition is considered dependent, he said.

Undergraduate students who are under age 24 as of December 31 of the award year are considered to be dependent for federal student aid purposes unless they are married, have dependents other than a spouse, are an orphan, are a veteran or active duty member of the U.S. Armed Forces or satisfy other very limited criteria, McCarthy said.

“If a student who is under age 24 doesn’t satisfy one of these criteria, the odds of being considered independent are very slim,” he said.

There could be unusual circumstances that may merit a dependency override, subject to a case-by-case review by the college financial aid administrator. McCarthy said that would include an abusive family environment (e.g., court protection from abuse orders against the parents), abandonment by the parents, or the incarceration, hospitalization or institutionalization of both parents, according to the U.S. Department of Education.

There are other ways to improve the likelihood of receiving more aid, even as a dependent student. McCarthy recommends you consider consulting with a certified financial planner to go over all those many options.

This story was first posted in November 2015. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.