Can living independently increase eligibilty for college financial aid?

Question

I am told that it can, but when filling out financial aid forms what will the definition of living independently of my parents be? I had been planing on living at home but I've recently heard it may be more advantageous to move to a friends house for my legal residency so i would be declared as living independently of my parents, which would make me eligible for more financial aid. Which is the way to go?

Answer 1

Yes, but only if your parents cannot claim you as a dependent on their taxes.  That is you must be footing the bill for your own existence.  You must be "independent" for one year before it will make a difference in college aid.  The good news is that once you hit that one year mark then you will see a pretty large increase in what you are eligible for.

Answer 2

If you're like most students, your number one source of educational financial aid will be the federal government. If that's the case, it will not help (or hinder) your eligibility if you choose to move out of your parent's home before applying.

In evaluating your eligibility, the government will place you in one of two categories - a dependent undergraduate or an independent undergraduate. The confusion comes from the use of the world "independent".

You might assume that you're "independent" if you're living alone, if you're paying your own way, or if your parents are refusing to assist with your college expenses. That would make you an "emancipated" student, but it won't make you an independent student. The government does not consider your emancipation status in determining whether you're independent or dependent.

For federal financial aid purposes, you are a dependent student unless you can answer yes to at least one of these questions:

Were you born before January 1, 1985?

Are you married? (if you're divorced, you're not married)

Do you provide greater than 50% of the support for one or more children?

Do you provide greater than 50% of the support for a dependent, other than a child, who lives in your home?

So - unless you're at least 23, you're married, you have children (and support them), or you care for a dependent in your home, you are a dependent student, regardless of whether your parents give you money, and regardless of whether you live in your parents' home.

Because you'll be classified as a dependent student, the Department of Education will base your financial aid eligibility on the financial circumstances of you AND your parents. When you complete your FAFSA (free application for federal student aid), you will be required to include information about your parents' income, assets, investments, savings, etc. You can see why there is no benefit to moving out of your parents' home before applying for financial aid.

Keep this in mind - whether it applies to your particular circumstances or not, the government expects your parents to pay their fair share of your educational expenses. Money or other assistance that you receive from the federal government is taxpayer money - and the government does not feel that the taxpayers have a special obligation to pick up the difference if your parents don't feel like they'd like to contribute to your college bills. If parents could avoid college expenses by simply refusing to pay for them, just how many parents would voluntarily contribute to their children's educational bills?

So there you have it - you'll be considered a dependent student no matter where you're living. Hopefully, your parents will be ready and willing to help out with your college expenses.

Good luck to you! For more info, check out the well-written information guide that the government publishes to explain financial aid. I've attached a link below.

edit: to answer your new question: that information that was given to you about living away from home for a year is incorrect. as i explained, you aren't treated as an "independent" for financial aid purposes until you turn 23, get married, or inherit the responsibility of providing (financially) for a child or some other dependent who lives in your home.

you will, however, qualify for additional financial aid as you continue on in your degree program. the stafford student loan limits go up from your first to your second year, and then again from the second to the third. ($3500 year one/$4500 year two/$5500 years three, four and five)

Answer 3

NO.  Even if you aren't a dependant, financial aid stuff still asks for your parent's financial information.  It's a crock.