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How to handle college financial aid when your parents are divorced

Cash for College, a college and career convention
Bianca Gutierrez, 16, from New Design Charter School, and her classmates attend Cash for College, a college and career convention, at the Los Angeles Convention Center.
Kevork Djansezian/Getty Images

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In this edition of Circuit Cents, we follow up on last week's show about finances and divorce and clarify the rules regarding students with divorced parents applying for financial aid. Whose income must you declare?

Here's what Ginny Dodds, manager of State Financial Aid Programs at the Minnesota Office of Higher Education, said:

That is probably the biggest question we get when people are filling out their FAFSA. According to federal law -- which we adopt here (in Minnesota) for state financial aid too -- if the student's legal parents are divorced or separated, you are supposed to choose the parent with whom the student had lived the most in the last year.

So you look back on the past year, and it's typically the custodial parent. It's based on where you physically lived and not on whose income is higher or lower. In the rare case that you lived with both parents an equal amount of time, then it would go to the parent who provided the most financial support to you.

She also recommended looking at the FAFSA site for more information about the ins and outs of financial aid.