The Free Application for Federal Student Aid (FAFSA) is key in identifying a student's eligibility for financial aid. The FAFSA is used "to apply for federal student financial aid, such as the Pell Grant, student loans, and college work-study," according to the FAFSA website, as well as for financial aid awarded by individual colleges. The FAFSA considers a family's income, assets and expenses to determine a student's eligibility for aid.
If a student's parents maintain separate households, the custodial parent is responsible for filing the FAFSA, according to finaid.org. The custodial parent is defined as the one with whom the student primarily lived during the past year. If living arrangements are divided equally, the parent who provides the most financial support to the child and/or claimed the child as a dependent on tax returns must file the FAFSA.
Child support or alimony received from the non-custodial parent, according to finaid.org, must be reported on the FAFSA. The non-custodial parent's income, however, is not included on the FAFSA form, and is not a consideration in the child's eligibility for financial aid.
Some private colleges, according to finaid.org, do consider the non-custodial parent's income when awarding aid generated by the school. These schools may require that the non-custodial parent provide a financial aid form, but this is separate from and does not affect the eligibility for federal or state aid.
The FAFSA considers not only the custodial parent's income, but the total household income. This means that a stepparent's income, if applicable, must be included on the FAFSA form. In addition to any child support or alimony received, the parent who files the FAFSA must report the income of his or her spouse, even if taxes are filed separately.