SoFi

When you’re married and are each other’s beneficiaries, it makes sense to create a single joint will, right? Not necessarily. Even if you plan to leave everything to your significant other upon death, creating this kind of legal document may lead to complications down the line.

Let’s take a closer look at the different kinds of wills married couples can create so you can decide what’s best for you.

What Is a Joint Will?

A joint will is a single shared legal document, signed by two or more people. It is relatively uncommon today, and many attorneys recommend against them. One of the motivations for a joint will is that, when one person dies, it’s nearly impossible for a surviving spouse to change the terms of the will. This can be problematic because circumstances change over time. What if the person mentioned to inherit property in the will has passed away?

That said, a joint will for a couple can seem desirable precisely because it’s not flexible. This can ensure that a child from a previous marriage, for example, inherits what is outlined in the will even if their parent dies before their new spouse does. But these sort of permanent clauses can be handled in a trust, a customized estate planning tool that can allow for complex, shifting situations.

How Do Joint Wills Work?

A joint will for a married couple is a single document, signed by two partners. When you’re both alive, changes can be made as long as you both agree. But once a partner dies, the will becomes binding.

For this reason, a joint will for a married couple can be binding, restrictive, and not necessarily optimal for the complexity of modern-day life.

Say that the will stipulates that the house the couple owns will be inherited by their three children upon the death of both spouses. But what if the surviving spouse has a financial emergency and wants to sell the house? Or simply wants to downsize to a smaller living space? Because of the will, they could be stuck in a difficult scenario.

Also consider that a joint will doesn’t always cover the what-ifs that can come up during life. From remarriage to family disputes to having more children, a joint will can lock assets in time, making it tough for the surviving spouse to move on.

How Do Mutual Wills Work?

Fortunately, there are options for those who worry about a joint will being too rigid. A more common option that offers flexibility is what’s known as a mutual will, or mirror will. In this case, two documents are created, one for each spouse. They may be identical, but because they are two documents, separately signed, the surviving spouse can then modify their own individual will when their partner passes away.

But what if you are concerned that you might die first and your surviving spouse could, say, omit a child or other loved one from their inheritance? (Yes, that may sound odd, but life contains many complicated family situations!) In this case, lawyers may recommend a trust as an option to ensure that your own personal wishes are carried out when it comes to your property. The trust can also make sure that your directives are followed when it comes to joint property mutually owned, like real estate.

Recommended: Important Estate Planning Documents to Know

Joint Will vs Individual Will: Pros and Cons

So, what are the pros and cons of joint wills versus individual (separate) wills? In general, the biggest con against a joint will may be the lack of flexibility. But for some people with relatively simple estates, this can seem like a positive.

Pros of a joint will:

•   Simplicity. It’s a one-and-done proposition!

•   Clarity. It ensures that both partners’ wishes, as written, will be respected, even after death.

Cons of a joint will:

•   Rigidity. If a partner gets remarried or has more children, it will be complicated if not impossible to change the original will.

Pros of an individual will:

•   Flexibility. Yes, this is a double-edged sword. These wills aren’t carved in stone, which can be a good or bad thing. But with individual wills, the wishes of the partner who dies first may not be fully honored. These concerns may be solved by the creation of a trust.

•   Simplicity. You can create one document and each sign it separately. Each individual is then free to amend their own will.

Cons of an individual will:

•   Flexibility. Yes, this is a double-edged sword. These wills aren’t “carved in stone” which can be a good or bad thing. Here’s the latter: With individual wills, the wishes of the partner who dies first may not be fully honored. These concerns may be solved by the creation of a trust.

•   Maintenance-intensive. A surviving partner may want to rewrite their will over time as their life circumstances change.

Do Husbands and Wives Need Individual Wills?

In most cases, yes, it’s beneficial if spouses have separate wills. The wills can be identical, but having two distinct documents that are individually signed can help protect against what-ifs in the future. Having individual wills can give the surviving spouse flexibility.

Let’s say that a joint will stipulates that a house owned jointly by a married couple will go to children upon the death of both spouses. That means if one spouse dies, the other spouse may not be able to sell the house that he or she lives in, even in the case of financial hardship. A joint will can lock a surviving spouse in time, despite evolving circumstances.

Instead, a couple may prefer individual wills. These can mirror each other, but the surviving spouse retains flexibility in case their needs or circumstances change after the spouse dies.

Worth noting: For some, the lack of flexibility of a joint will may be seen as positive. For example, some couples may want a joint will to ensure their children receive an inheritance, even if the surviving spouse remarries. However, some legal experts believe this goal can better be achieved through the creation of a trust.

As you think about making your will, it can be helpful to consider the pros and cons of a joint will. Getting an expert opinion can also be a smart move.

What Happens to a Joint Will When Someone Dies?

A joint will is essentially frozen in time when someone dies. The will becomes “irrevocable,” and property must be divided according to the terms of the will. If it says all assets are to be inherited by the surviving spouse, then the surviving spouse will inherit assets. But confusion may occur if and when both spouses pass away. A joint will then makes it hard, if not impossible, to reallocate property.

Let’s consider another scenario to see why a joint will can be problematic. Perhaps a joint will specifies that a certain sum of money is to go to a charity upon death. If the charity no longer exists after one spouse passes away, this may lead to complications and a legal headache.

In short: A joint will is similar to a time capsule. While its contents may make sense now, it can be helpful to consider what-ifs that may happen ten, 20, or 50 years in the future. This can lead some couples to decide that individual wills will work better.

Recommended: Life Insurance Guide

Can You Make a Joint Will Online?

It is possible to make a joint will online. But because not every state recognizes a joint will, it’s important to make sure you live in a state that does before you move forward.

The Takeaway

End-of-life planning is an important way to express your wishes and protect those closest to you. A will is one key component of that, but married couples have an important choice to make when deciding whether to have joint or individual wills. Even if you and your spouse are the ultimate joined-at-the-hip lovebirds, having separate wills may be a good idea. It can often provide more flexibility and family peace in the years ahead.

When you want to make things easier on your loved ones in the future, SoFi can help. We partnered with Trust & Will, the leading online estate planning platform, to give our members 20% off their trust, will, or guardianship. The forms are fast, secure, and easy to use.

Photo credit: iStock/fizkes

Coverage and pricing is subject to eligibility and underwriting criteria.
Ladder Insurance Services, LLC (CA license # OK22568; AR license # 3000140372) distributes term life insurance products issued by multiple insurers- for further details see ladderlife.com. All insurance products are governed by the terms set forth in the applicable insurance policy. Each insurer has financial responsibility for its own products.
Ladder, SoFi and SoFi Agency are separate, independent entities and are not responsible for the financial condition, business, or legal obligations of the other, SoFi Technologies, Inc. (SoFi) and SoFi Insurance Agency, LLC (SoFi Agency) do not issue, underwrite insurance or pay claims under LadderlifeTM policies. SoFi is compensated by Ladder for each issued term life policy.
Ladder offers coverage to people who are between the ages of 20 and 60 as of their nearest birthday. Your current age plus the term length cannot exceed 70 years.
All services from Ladder Insurance Services, LLC are their own. Once you reach Ladder, SoFi is not involved and has no control over the products or services involved. The Ladder service is limited to documents and does not provide legal advice. Individual circumstances are unique and using documents provided is not a substitute for obtaining legal advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOPRO-Q425-015

If you’re thinking of taking a road trip, using a gas trip cost calculator can help you determine how much you are likely to spend filling up your tank. Then you can use that information to decide whether it’s more cost-effective to drive, take a train or bus, or fly.

Let’s look not only at a gasoline cost trip calculator table, but also why you should calculate how much you’ll spend on gas and how you can save money filling up at the pump.

Why Use a Gas Cost Trip Estimator

You may think nothing of filling up your gas tank every few weeks when you’re only driving to work and the store. But consider how much gas you’d use for a trip from, let’s say, San Diego to New York City. Understanding what it will cost you to fuel up for an entire trip can help you better budget your expenses.

Using a gas trip cost calculator can help you figure out how much of your entire trip budget will be dedicated to fueling up.


💡 Quick Tip: Online tools make tracking your spending a breeze: You can easily set up budgets, then get instant updates on your progress, spot upcoming bills, analyze your spending habits, and more.

How to Calculate Your Gas Cost Trip

To figure out how much gas will cost for a road trip, you can, of course, use a trip cost calculator. You’ll need to input basic details, like your type of car (different sizes and types of cars burn gas at different rates) and your route, and the calculator can estimate with real-time gas prices.

A simple method to calculate your gas cost is to look at your route and the total distance in miles, and divide this number by the number of miles per gallon your vehicle gets. (You can check your owner’s manual to find this out if you don’t already know.) This will tell you the number of gallons of gas you’ll need for the entire trip.

Now you’ll need to know the price of gas so you can multiply it times the number of gallons you need. Since gas prices by state may vary wildly, you might take an average of prices found in five places along the way. Tools like Gas Buddy let you search for gas prices in a given city, so you can use this for research.

Gas Cost Trip Calculator Table

Let’s use the process above to illustrate how you can be your own gas calculator for trip costs.

As you can see, it would cost about $407.50 for gas for the entire trip. Of course, this is based on an average cost of gas, and prices will fluctuate over time and in different towns and cities.

💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.

Examples of Gas Cost Trips

Let’s look at a few other examples of trips and how much they would cost in gas.

Reasons to Calculate Your Gas Cost

So why should you bother using a road trip cost calculator? Well, most people don’t have unlimited funds when it comes to taking a road trip, so for starters, it can help you see how much you’d spend. You might decide it’s not worth driving if the cost exceeds what you’d pay for a flight, bus, or train ride.

Even if you’re not planning a big trip, looking at how much it costs to drive on a tank of gas can be helpful for maintaining your monthly budget. Once you understand how much you’re spending on gas, you might limit how often you drive to save money.

Speaking of saving money, here are five ways to save money on gas.

Tips on How to Save on Gas Money

Speaking of saving money, let’s look at how to save money on gas.

Plan Where You’ll Fuel Up

If you’re planning a road trip, use a tool that shows you exactly where the cheapest gas can be found. You might be able to save $.10 or more a gallon simply by planning ahead. There are even some trip fuel cost calculators that will help you plan where to stop based on gas prices.

Consider How You Pay

There are different types of credit cards that can help you save at the pump. Branded gas credit cards often offer rewards that will shave off a few cents per gallon or give you a bonus after you’ve charged a certain amount of purchases.

You might also consider a cash back credit card that gives you cash or credits for your purchases once you’ve hit a certain threshold.

Look into Alternative Transportation

You may be quick to rely on cars to get around, but there are often other overlooked methods of transportation to consider. Whether it’s a bus, train, Uber, or plane, you might be able to save money by leaving your car at home.

You can also cut your gas costs by splitting them with a friend.

Another way to stick to your travel budget? A money tracker app, which can help you keep tabs on where your money is going while you’re on the road.

Only Use Premium if Necessary

Most cars run just fine on regular unleaded gas, which can be significantly cheaper per gallon than premium versions, especially if you’re on a long trip. Check your car manufacturer’s recommendations to see if you can use regular unleaded gas.

Drive an Empty Car

The heavier your car is, the more gas it burns. So if you’ve been lugging around something heavy unnecessarily, consider leaving the load at home before you drive.

The Takeaway

Paying attention to how much gas costs, particularly for a road trip or long commute, is smart financial planning. Whether you use an online version or crunch the numbers on a piece of paper, a gas trip cost calculator can help you figure out how much you may want to budget for fill-ups.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

How do I calculate gas cost for a trip?

To calculate gas for a long road trip, divide the number of miles of the route by the miles per gallon your car gets. This is the number of gallons you’ll need to drive the distance. Then, average the cost of gas on your route and multiply this times the number of gallons to get the total cost of gas for your trip.

How much would 1 mile of gas cost?

Divide the cost per gallon by the number of miles per gallon your car will go. For example, if you pay $3.99 per gallon and your car gets 22 miles per gallon, driving one mile would cost about $.18.

How do you calculate fuel to destination?

To calculate how much fuel you’ll need to get to your destination, divide the number of miles of the remaining route by the miles per gallon your car gets. Then, average the cost of gas on your route and multiply this times the number of gallons to get the total cost of gas for your trip.

Photo credit: iStock/georgeclerk

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SORL-Q425-007

Once you’ve decided it’s time to buy life insurance, the big question is whether a term or whole life insurance policy is right for you.

Both achieve the same goal: protecting your loved ones from financial hardship when you aren’t there to provide for them. But they go about doing this in very different ways. To decide which one to buy, a little knowledge is an important thing.

Let’s take a look at what each policy offers and highlight some considerations. By the end of this article, you should have a good idea of whether buying term or whole life insurance is right for you.

What Is Term Life Insurance?

Just as the name implies, term life insurance provides coverage for a set term or number of years. What that means is, if you die during the term of the policy, your beneficiaries receive a lump sum payment.

Here’s an example of how that works. Let’s say you take out $500,000 of term life insurance for 20 years. If you, the policy holder, were to die at year 19, your beneficiaries would receive the half-million dollars. But if the policy ends after 20 years, and you were to die a few months later, there’s no benefit at all.

What’s good about term life insurance is that it can offer coverage when you may need it most. With terms typically running between 10 and 30 years (though other variations are available), this kind of policy can give you the reassurance that, even in the worst-case scenario of your death, expenses like tuition, housing, and daily living costs can still be covered.

Many people purchase a term that will see them through the end of a mortgage or a child’s graduation from college. Some insurance providers offer the option of extending a policy as it comes to its conclusion. This is known as renewable term life insurance; check prices in advance as these extensions can be for a brief time period and tend to be costly.

It’s worth noting that if you buy, say, a 30-year term life insurance policy and are alive at the end of that time period, you don’t get a refund of the funds you’ve doled out. You have paid for protection but you didn’t use it. This may strike some people as “throwing away” their money.

For people who have that sentiment, there are options like “return-of-premium” policies that could help you recoup costs. This kind of life insurance is usually considerably more affordable than whole life, which we’ll explore in a minute. Because you are only buying protection for a specific time period, the premiums (the monthly fee you pay for coverage) are typically lower and are fixed.

What Is Whole Life Insurance?

Whole life insurance is a popular type of permanent life insurance that offers coverage for a lifetime.

Generally speaking, once you get a policy, it stays in effect for the rest of your life, unless you cancel it. When the policy owner passes away, their beneficiaries receive a lump sum payment. This can offer peace of mind and may feel like a necessity if, say, you have a loved one who has a chronic health condition and/or cannot live independently.

Whole life insurance is a more complex financial product than term life insurance. It’s essentially a bundled insurance policy plus a savings account. What’s known as “cash value” is built into the policy so you are building equity. Part of your premium is usually diverted into a separate account; that account can earn interest and may be tapped, as a loan.

This is not the only kind of life insurance policy with a cash account attached to it. For those who want their cash account to grow in different ways, there are also these kinds of permanent life insurance:

•   Universal life insurance, which earns interest on the cash value account and may allow for flexible monthly payments.

•   Variable life insurance, which allows you to invest the cash part of your policy in stocks, bonds, and mutual funds. While these can grow your money faster, they also bring some degree of financial risk if the market drops.

•   Variable universal life, which gives you the ability to invest your savings account in stocks, bonds, and the like, as well as flexible premiums depending on how your cash value performs.

•   Indexed universal life, in which your cash account is linked to a stock market index. It earns interest based on this index, but often there is a minimum rate of return (as well as a limit on how high the interest can go), which makes it less risky than a variable universal life plan.

In general, whole life and the other kinds of permanent life insurance usually have higher initial premiums than term life insurance (its cost may even be a multiple of what you would pay for term insurance). This is due to its lifelong “in effect” status and the way it can help you grow the money in your cash value account.

Recommended: 8 Popular Types of Life Insurance for Any Age

How Do Term and Whole Life Insurance Differ?

Some people hear the differences between term and whole life insurance policies and know in an instant which one is right for them. Other people have to mull the options for a while and maybe want to make a “pros vs. cons” list. If you fall into the latter camp, don’t worry. Let us help by summarizing some of the key differences right here.

Difference 1: Policy Features

Difference 2: Costs

The cost of a policy is undoubtedly a huge factor in your decision. So let’s cut to the chase: Whole life insurance costs up to 15 times more than term life for the same amount of coverage.

That’s because whole life insurance provides lifelong coverage and also includes that “cash value” savings component. It’s a more complex financial product, while term insurance is just straightforward coverage for a certain number of years.

Also know that while the cash value portion of a whole life policy can be tax-deferred over the life of the policy, when you redeem the cash value, there are usually tax implications due to the interest accrued.

Recommended: How to Buy Life Insurance in 9 Steps

How to Choose Between Term and Whole Life Insurance

When deciding which kind of policy to buy, there is no hard and fast rule. All that matters is what’s right for you. Consider these questions to help figure out your best option.

1. How long do you need coverage to last?

Do you need coverage to last your entire life, perhaps to fuel a trust for your children or provide a death benefit for a family member with a disability? Then you may be happiest with whole life insurance, meaning a death benefit will be paid, even if you live well past age 100.

If, however, you only need to know that a certain time frame is covered (say, the length of your mortgage or until your youngest graduates from college), then term life may work best for you. A policy can usually be purchased in various increments between 10 and 30 years.

2. Do you want just coverage or savings too?

Some people are just shopping for a policy that offers protection and peace of mind. They want to know that, should they die within a certain time frame, their loved ones would receive money to help cover expenses. For this insurance shopper, a term policy may make sense. It will pay a lump sum benefit if the policy holder dies within the term.

But if you are looking for a product that doesn’t just offer coverage but also helps you save, then a whole life plan may be a good move. These policies also have a cash value account that can grow over the years.

3. How much can you spend on life insurance?

There’s a pretty big disparity in the price of the two main kinds of life insurance. Whole life policies, which deliver ongoing, permanent coverage, typically cost much more than term insurance, which is only active for a limited number of years. Estimates say that a person will have to spend anywhere up to 15 times more for whole life versus term insurance. Also, the interest on the cash value of a whole life policy is usually subject
to taxes as well.

4. Does my age determine whether I should get term or whole life insurance?

In general, your age doesn’t determine whether you should buy term or whole life insurance. For instance, people often purchase a policy when they marry or are expecting their first child. These milestone events mean you have people depending on you, and you may well think now is the time to get life insurance coverage. However, deciding on term insurance that runs until your child’s 21st birthday or whole life insurance which delivers permanent coverage is a matter of personal preference and finances.

There are some cases in which term insurance is likely to be the better bet. For instance, if you and your partner took out a mortgage together, you might want term insurance that covers the length of your home loan. That way, if anything were to happen to you, your spouse doesn’t wind up being solely liable for all that debt.

Another scenario is buying life insurance when you are quite old and want to get coverage. In this case, term life insurance is likely to again be a good bet. You could buy a term of 10 or 20 years if you are in good health.

For those with medical issues, what’s called simplified issue or guaranteed issue term insurance may be best. These are typically small policies that cover end-of-life expenses, and they require no medical exams.

5. What if I Already Have Life Insurance and Want to Change My Policy?

It’s human to change your mind. No matter how much research you do, time and circumstances can make you rethink your purchase. Some term life insurance policies can be turned into whole life or other types of permanent insurance. This may have to occur within a certain time window, and it’s likely to trigger pricier premiums. Talk to your insurance company about your options. Your term may also be renewable or extendable.

With whole life insurance, changes to the policy may result in surrender charges, since the policy is a permanent one. Check with the policy provider to know what to expect.

The Takeaway

While no one wants to think about their death, the silver lining to life insurance shopping is you know you’ll secure a way to provide for your loved ones when you’re no longer here.

To recap the two different approaches: Term life insurance has a time limit on coverage, and tends to be considerably more affordable. Whole life is a form of permanent life insurance that offers lifelong protection and an additional cash account, but tends to cost much more than term. As you weigh your needs and options, don’t be swayed by what others buy. This is an important financial decision that should be tailored to your specific situation, finances, and aspirations.

SoFi has partnered with Ladder to offer competitive term life insurance policies that are quick to set up and easy to understand. Apply in just minutes and get an instant decision. As your circumstances change, you can update or cancel your policy with no fees and no hassles.

Coverage and pricing is subject to eligibility and underwriting criteria.
Ladder Insurance Services, LLC (CA license # OK22568; AR license # 3000140372) distributes term life insurance products issued by multiple insurers- for further details see ladderlife.com. All insurance products are governed by the terms set forth in the applicable insurance policy. Each insurer has financial responsibility for its own products.
Ladder, SoFi and SoFi Agency are separate, independent entities and are not responsible for the financial condition, business, or legal obligations of the other, SoFi Technologies, Inc. (SoFi) and SoFi Insurance Agency, LLC (SoFi Agency) do not issue, underwrite insurance or pay claims under LadderlifeTM policies. SoFi is compensated by Ladder for each issued term life policy.
Ladder offers coverage to people who are between the ages of 20 and 60 as of their nearest birthday. Your current age plus the term length cannot exceed 70 years.
All services from Ladder Insurance Services, LLC are their own. Once you reach Ladder, SoFi is not involved and has no control over the products or services involved. The Ladder service is limited to documents and does not provide legal advice. Individual circumstances are unique and using documents provided is not a substitute for obtaining legal advice.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOPT1223001

The Free Application for Federal Student Aid or FAFSA® form is required for students who are interested in receiving federal financial aid. Dependent students must report parents’ information when they fill out the FAFSA form, but this can become complicated when a student has parents who are divorced.

The federal government treats divorced parents differently than parents who are married. Understanding the requirements for the financial information required by the FAFSA could help students improve their chances of receiving federal student aid and potentially lower the amount of student loans they need to obtain a degree.

Continue reading for more information on filling out the FAFSA if your parents are divorced or separated.

What Complicates FAFSA for Divorced Parents?

The FAFSA treats parents who are divorced differently than it treats parents who are married. If a student’s parents are married, information about both parents must be included on the FAFSA form. If a student’s parents are divorced or separated, the parent who provided more financial support during the last 12 months is considered “the contributor” and must provide their information. If both parents provided an equal amount of financial support, the parent with the greater income and assets is the contributor and must provide their information.

If the contributing parent has remarried by the time a student is filing the FAFSA, your stepparent is considered a parent if they have adopted you. If they haven’t adopted you, the form may still prompt your parent to provide your stepparent’s information depending on their tax filing status.

Recommended: Important FAFSA Deadlines for Students and Parents

FAFSA Tips for Students with Divorced Parents

Here are some important questions to ask yourself and tips for completing the FAFSA application with divorced parents:

Who to Count as Parents for FAFSA

According to the FAFSA, a “parent” means your legal (biological and/or adoptive) parent.

If your parents are divorced, the FAFSA requests information from the parent who provided more financial support during the previous 12 months. If both parents shared support equally, you’ll provide information for the parent who earns more.

If your parent is remarried, you may need to provide information on the stepparent, as well.

What Is a Custodial Parent?

In the past, FAFSA defined a custodial parent as the parent you spend the most time living with during the year. The parent responsible for filing the FAFSA is now determined based on whichever parent provides more financial support to the student.

What About Stepparents and Common-Law Spouses?

Generally, you’ll need to provide the financial information for a stepparent who is married to the custodial parent.

Should Alimony Be Included as Income?

Any alimony or child support received by the custodial parent should be reported on the FAFSA.

Parent’s Education Level

The FAFSA will ask you to include the education levels of your parents. You only need to include information about either your birth or adoptive parents. In this section, the FAFSA does not need information about your stepparent.

What If My Divorced Parents Still Live Together?

If your parents live together, but are divorced, the marital status should be “Unmarried and both legal parents living together.” You need to provide information about both of them on the FAFSA form.

If your parents live together, but are separated, the marital status should be “married or remarried.” Do not use “divorced or separated.” You should provide information about both of them on the FAFSA form.

Additional Sources to Finance Tuition

Many students seek alternative financial aid to finance college if they do not qualify for federal aid or if the amount of federal aid allocated will not cover the entire tuition cost.

About half of college tuition and living expenses are paid by the income and savings of a student’s family members, according to a Sallie Mae study, “How America Pays for College 2025.”

Federal Aid

There are many other sources that could help a student obtain funding for tuition, books, and living expenses. When filling out the FAFSA, students are applying for federal financial aid. This includes federal student loans, the federal work-study program, and some federal grants. However, many states and colleges use the information from the form to award their own grants, scholarships, and loans.

Federal aid is provided on a first-come first-served basis, so it can potentially be helpful to file your FAFSA early. Check out even more detailed information in SoFi’s FAFSA guide.

Federal student loans can be either subsidized or unsubsidized.

Subsidized federal loans are given to students based on financial need. The interest on these loans is subsidized by the federal government, which means students will not be responsible for repaying the interest that accrues while they are enrolled at least part time or during their grace period.

Unsubsidized loans are not awarded based on need and will begin accruing interest as soon as the loan is disbursed.

Recommended: Types of Federal Student Loans

Scholarships

If federal aid is not enough to cover the cost associated with attending college, there are other options available to help you pay for college. Two sources of funding are grants and scholarships. These are highly sought after by students because they do not have to be repaid. Many of them require students to apply annually.

SoFi’s Scholarship Search Tool can help you find scholarships based on your location, level of study, and more.

Part-Time Job

Some students may also consider getting a part-time job to help pay for tuition or living expenses. Consider looking both on and off campus, or even online.

Private Student Loans

When other financial aid isn’t enough, private student loans can fill the funding gap for expenses like tuition, housing, and books.

Private student loans are offered by private organizations, like banks or online lenders, and can be more expensive than federal student loans. They also don’t come with the same borrower protections as federal loans, like deferment or income-driven repayment. That’s why private student loans are generally considered an option after students have exhausted all other sources of financing.

The loan terms and interest rate will vary from lender to lender and will likely be determined by the borrower’s financial history and credit score. Those interested in borrowing a private loan should consider shopping around with various lenders to find the best fit for them.

The Takeaway

Navigating the FAFSA process can be complex, especially for students whose parents are divorced or separated. The key is to correctly identify the “contributor” parent based on who provided more financial support, and to understand how stepparents and living arrangements can impact the application. By understanding these nuances and exploring all available funding options — including federal aid, scholarships, grants, part-time jobs, and private student loans — students can maximize their chances of securing the financial assistance needed for their education.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

Does FAFSA require both parents’ income if they are divorced?

If your parents are divorced, you’ll generally report the information for the parent who provided the most financial support for the past 12 months. If your parents split financial support equally, then the parent with the greater income is responsible for completing the FAFSA.

How do you determine who parent 1 and parent 2 are for FAFSA?

The FAFSA doesn’t currently specify a parent “1” or “2.” Instead, it directs you to provide information for the “parent” (if your parents are divorced, this would be the parent who provided more financial support in the past 12 months), then provide information for the “parent’s spouse or partner.”

What is the maximum parent income to qualify for FAFSA?

There are no income limits when it comes to filling out the FAFSA or qualifying for federal financial aid. Even if your parents are high earners, you could still qualify for certain types of aid, such as scholarships or federal student loans. The FAFSA application is free to fill out, so it’s almost always worth taking the time to do so.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

SoFi Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOISL-Q425-003