Note that a high percentage of student claims to be a ward of the court are made in error, because the student assumes that having a legal guardian makes them a ward of the court. Many financial aid administrators will select all students who answer yes to the question about being an orphan or ward of the court for verification.

Often a minor becomes a ward of the court when the court determines that the child will be subject to abuse or neglect if they remain with the parent or if both of the student's biological or adoptive parents are deceased.

A Voluntary Placement Agreement (VPA) generally does not make one a ward of the court, as the parent or legal guardian retains legal custody of the child.

An important aspect of ward of the court status is determining who has legal custody of the child. If the court has taken custody of the child, the child is a ward of the court. The court might assume custody of the child because it found that the parents are unable to properly care for the child. If the child remains in the legal custody of the parents, the child is not a ward of the court even if the court imposes its authority over the child.

For example, a child does not automatically become a ward of the court upon being incarcerated. Likewise, emancipation does not make a student a ward of the court. Neither incarceration nor emancipation of the student is sufficient on its own to make the student independent.

Emancipation occurs when the child is no longer under the legal authority and control of another. This can occur when the child reaches the age of majority, marries, enters military service, is fully self-supporting or by court order. An emancipated child is legally an adult. Since a child who reaches the age of majority can still be considered a dependent for financial aid purposes (and self-supporting is insufficient grounds for independent student status ever since the Bright-Line test was abolished in 1992), emancipation by court order is no different. The Higher Education Act specifies who is considered a dependent for financial aid purposes, and does not include an exception for emancipation. (Emancipation is defined by state law, and as such cannot overrule Federal law.) So even though an emancipated child no longer receives financial support from his or her parents, the parents are still obligated to complete the FAFSA form. However, the circumstances that lead a court to grant an emancipation petition might themselves be sufficient grounds for a dependency override. (Note that some states (e.g., Colorado) may allow emancipation as an alternative to age requirements for eligibility for in-state tuition. So emancipation can have an impact on state aid, but not on federal aid.)

The key issue for financial aid purposes is that when a child becomes a ward of the court, no parent or other person is financially responsible for the child. Legal guardians and foster parents are not financially responsible for a ward of the court. Adoptive parents, on the other hand, are financially responsible for the child.

If the student is declared a ward of the court before the end of the award year, the student is considered to be an independent student for the award year and the student's status would need to be updated.

Note that a child can be a ward of the court and still have contact with his or her biological parents or even still be living with the parents (albeit under court supervision). The biological parents, however, are no longer empowered to make any decisions on behalf of the child.

A student who was a ward of the court but was adopted before age 18 is not considered independent. A student who was a ward of the court but was released from that jurisdiction to the custody of the student's parents before age 18 is not considered independent. (A few financial aid administrators would use a dependency override if the student was only a few months shy of their 18th birthday; most would not.) If the student was adopted after age 18 but was a ward of the court until age 18, the student is independent.

The school financial aid administrator should ask for a copy of the court order that declared the child a ward of the court (e.g., Form 10-24 Order of Disposition, Review of the Status of Child Freed for Adoption). It is important to determine not only whether the student has a court-appointed legal guardian, but the reason for the appointment and whether this constitutes a ward of the court situation. If there is any confusion as to whether the student is a ward of the court or not, the financial aid administrator should ask for a letter from the judge clarifying whether the child is a ward of the court for student aid purposes (i.e., per Section 480(d)(2) of the Higher Education Act of 1965 [20 USC 1087vv]).