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Guide to Completing the FAFSA for LGBT Families

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This guide discusses issues that occur when lesbian, gay, bisexual and transgendered families apply for federal student aid using the Free Application for Federal Student Aid (FAFSA). It provides practical advice about how to correctly address these issues under current law.

Children of Same-Sex Couples

A child of a same-sex couple is considered to have only one parent for federal student aid purposes.

The FAFSA's definition of parent includes biological or adoptive parents. If these parents are divorced, section 475(f) of the Higher Education Act of 1965 specifies which parent is responsible for completing the FAFSA. (The parent responsible for completing the FAFSA is the parent with whom the student lived the most during the 12-month period ending on the FAFSA application date. If the student lived with both parents equally, then the parent who provided the most support during this 12-month period is responsible for completing the FAFSA. Otherwise the parent who provided the most support during the most recent calendar year for which parental support was provided is responsible for completing the FAFSA. Generally, it is financially advantageous for the parent who has the lower income to be the one responsible for completing the FAFSA, since this usually results in a lower expected family contribution and a greater amount of need-based financial aid.) If this parent has remarried, the income and assets of the stepparent are also reported on the FAFSA. But note that same-sex couples are not considered married for federal student aid purposes, so the other partner in a same-sex marriage would not be treated like a stepparent.

Still, it is possible for a student to have two parents of the same sex, if one is a biological parent and the other adopted the student or if both parents adopted the student.

If the student has two legal parents, the FAFSA is completed as though his or her parents are divorced. Since the student lives with both parents equally, the parent who provides the most support to the student will be responsible for completing the FAFSA. The parent who is responsible for completing the FAFSA is often referred to as the custodial parent. (This has nothing to do with which parent has legal custody.)

If the child has only one legal parent, that parent is responsible for completing the FAFSA.

The other parent cannot be counted in household size unless he/she receives more than half his/her support from the parent who is responsible for completing the FAFSA.

The other parent's income and assets are not reported on the FAFSA. However, any support the student receives from the other parent is reported on the FAFSA as untaxed income to the student.

If the student's parents have other children, the children can be counted in household size if the parent responsible for completing the FAFSA is the biological or adoptive parent of the child. The children can also be counted in household size if the children live with this parent and the parent provides more than half their support. Otherwise it is possible that some of the student's siblings might not be counted in household size on the student's FAFSA.

If the student is a beneficiary of a 529 college savings plan owned by the other parent, it can have a severe negative impact on financial aid eligibility. A 529 plan owned by the student or the parent responsible for completing the FAFSA is reported as a parent asset on the FAFSA. Distributions from such a plan are ignored. Such a 529 plan has a minimal impact on eligibility for need-based financial aid. A 529 plan that is owned by neither the student nor the parent (e.g., a 529 plan owned by the other parent) is not reported as an asset on the FAFSA. But distributions from assets that are not reported on the FAFSA are counted as untaxed income to the beneficiary on the FAFSA. This can reduce aid eligibility by up to half of the amount of the distribution. The most pragmatic solution is to change the account owner to either the student or the parent responsible for completing the FAFSA.

If a student has two legal parents, both parents can borrow from the Parent PLUS loan program, provided that the total of the two loans does not exceed the annual loan limit. The annual loan limit for the Parent PLUS loan is the cost of attendance minus other aid received. A same-sex parent who is not a biological or adoptive parent cannot borrow from the Parent PLUS loan program.

Student in a Same-Sex Marriage

A student in a same-sex marriage is considered unmarried and does not report the income and assets of the spouse on the FAFSA. However, any support the student receives from the spouse is reported on the FAFSA as untaxed income to the student.

The spouse may not be counted in household size (or number in college) on the FAFSA unless the spouse lives with the student and the student provides more than half of the spouse's support.

If the same-sex couple has children, the children can be counted in household size if the student is the biological or adoptive parent of the child. The children can also be counted in household size if the children live with the student and the student provides more than half their support.

This may affect whether the student is considered an independent student. Any support from the student's same-sex spouse to the student's biological or adoptive children counts as part of the student's support of the children, along with government benefit programs such as TANF, food stamps, WIC and so on. Any money the student receives from sources other than the student's parents count as part of the student's support of the student's children. If the student's support of the children exceeds the support provided by his/her parents to the children, the student is independent by virtue of having a dependent other than a spouse.

If the student is not age 24 or older as of December 31 of the award year, and does not satisfy any of the other requirements for independent student status, it is possible that the student will be considered dependent on his/her parents. (If the student provides more than half support to his/her spouse, he/she may be considered independent by virtue of having a dependent other than a spouse, since the student is not considered married.)

If the student has an estranged relationship with his/her parents due to his/her LGBT status, the parents might refuse to file the FAFSA, preventing the student from obtaining financial aid. Some college financial aid administrators will grant students in such a situation a dependency override. (Note that the college does not and cannot grant the dependency override because the student is in a same-sex marriage. Rather, the college may grant the dependency override because of the hostile family environment.) Not every college financial aid administrator will grant a dependency override in such situations.

Dear Colleague Letter GEN-05-16

Dear Colleage Letter GEN-05-16 addresses the issue of same-sex marriage and eligibility for federal student aid. A Dear Colleague Letter is a form of subregulatory guidance. The following is the relevant excerpt from GEN-05-16:

Free Application for Federal Student Aid (FAFSA) questions and same-sex marriage.

Q8. May an individual who is a member of a same-sex union report his or her marital status on the FAFSA as "married?"

A8. No. According to the Defense of Marriage Act of 1996, "...the word 'marriage'means only a legal union between one man and one woman as husband and wife, and the word 'spouse' refers only to a person of the opposite sex who is a husband or a wife." Therefore, an individual in a same sex-union may not indicate that he or she is married on the FAFSA.

Q9. If an individual is a dependent student and his or her parents are living together as a couple, but are not married, whose information must the individual report on the FAFSA? What if the individual's parents are of the same sex and living together as a couple?

A9. A dependent applicant whose parents are living together as a couple but are not married (regardless of whether the parents are a same-sex couple or not) must provide information for the parent with whom he or she lived with more during the 12 months preceding the date the FAFSA is signed. If the individual did not live with one parent more than the other, the individual must provide information for the parent who provided more financial support during the 12 months preceding the date the FAFSA is signed, or during the most recent year that the individual received support from a parent.

Selective Service Registration

To be eligible for federal student aid, male students must have registered with Selective Service. Transgendered individuals often run into trouble with this requirement because of confusion over whether they were supposed to register. There's also confusion about what they should do if they were required to register but didn't.

The rules are straightforward: The requirement to register for Selective Service depends on the gender at birth (i.e., the sex listed on the birth certificate). If you were born male, you must register with Selective Service between ages 18 and 25, even if you are now female. If you were born female, you are not required to register for Selective Service (and cannot register for Selective Service) even if you are now male.

Whether you will ultimately be ineligible for military service is irrelevant. For example, someone with a heart condition will be barred from military service, but must still register with Selective Service. Similarly, you must register for Selective Service if you were born male.

If a transgendered individual did not register for Selective Service but has not yet reached age 26, she can and should register now before filing the FAFSA. The online FAFSA will provide the applicant with an opportunity to register with Selective Service. However, this question does not show up if the applicant specifies that she is female. (There are no questions that ask if the applicant is transgendered.) The simplest solution is to register online at the Selective Service System web site.

If a transgendered individual did not register for Selective Service and is age 26 or older, they should ask for a Status Information Letter and then appeal to the college's financial aid administrator for an override of automatic loss of aid eligibility. College financial aid administrators have the authority to override the loss if aid eligibility if the failure to register was not knowing and willful. In most cases a failure to register by a transgendered individual was not knowing and willful because she genuinely (but incorrectly) believed that she was not required to register. Most college financial aid administrators will override the loss of aid eligibility in the case of transgendered individuals, but not all will do so.

The statutory requirements appear at 50 Appendix USC 462(f)(1) and 20 USC 1091(n), and the regulations appear at 34 CFR 668.37.

The Selective Service System web site includes a frequently asked question for individuals who have undergone a sex-change operation:

How does the Military Selective Service Act apply to individuals who have had a sex change?

Individuals who are born female and have a sex change are not required to register. U.S. citizens or immigrants who are born male and have a sex change are still required to register. In the event of a resumption of the draft, males who have had a sex change can file a claim for an exemption from military service if they receive an order to report for examination or induction.

Name Mismatches

The applicant's name on the FAFSA must match the name associated with the applicant's Social Security number. If the two names do not match, as often happens with transgendered individuals, the FAFSA will be rejected. Even the use of a nickname will be rejected. The name on the FAFSA must be the applicant's full legal name.

If a transgendered individual's FAFSA has been rejected because of a Social Security Administration mismatch, the most pragramtic solution is to submit the FAFSA with the applicant's current legal name. (The name on the college's records may then need to be changed as well, as most administrative software systems used by colleges are not set up to handle an individual having two different sets of given names.) A legal name change can take time, which would result in a delay in filing the FAFSA and a possible loss of eligibility for state grants and other forms of financial aid which may be awarded on a first-come, first-served basis.

A legal name change generally requires a court order to be accepted by government agencies and financial institutions. After obtaining a legal name change, the student will need to file Form SS-5 with the Social Security Administration to change the name on their Social Security card. The student will also need to get an updated driver's license.

 

 
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