How Marriage Law Ruling Affects Financial Aid Options
Last year, the U.S. Supreme Court ruled that part of the federal law against gay marriage, the Defense of Marriage Act, was unconstitutional. This section had prohibited all federal agencies, including the Department of Education, from recognizing same-sex marriages for the purpose of federal programs, including financial aid programs.
This ruling resulted in significant changes to eligibility for both federal student aid and certain student loan repayment options. Here are five things all families, regardless of current marriage status, need to know about changes to the financial aid process in the wake of the ruling.
[Get to know four recent changes to student loan rates and rules.]
1. It's where you got married, not where you live that matters : If you were legally married in a state or foreign jurisdiction that recognizes your marriage, you're now considered married for federal financial aid purposes, even if you currently live or attend school in a location that doesn't recognize your marriage.
This is called the "place of celebration" rule, and it applies to both parents and students. However, it does not apply to civil unions or similar relationships that might also be recognized under state law.
2. Free Application for Federal Student Aid information collection will change for some families : In the past, if a student's biological parents lived together without being married, the FAFSA requested financial information from only the parent who provided the most support. Any support provided by the other parent was included under untaxed income on the FAFSA. This led to inequalities among families with similar financial situations but different relationship statuses.
Going forward, the FAFSA will collect the information of both biological parents if they are living together. Divorced parents will still report the information of the parent who provides the most financial support and those who have remarried will still be required to include the stepparent's financial information.
If you're confused, take a look at this detailed primer on defining the parent for FAFSA purposes.
[Learn how to avoid making these common FAFSA mistakes.]
3. Military spouses can receive in-state tuition rates : One benefit of being in the military , or of being married to someone who is, is receiving the lower in-state tuition rate in whichever state you happen to live or be stationed in without waiting the year usually required to establish residency.
Prior to the ruling, spouses in same-sex marriages could not take advantage of this benefit because the federal government did not recognize their marriage. Going forward, all legally married spouses may use this tuition benefit, even if the state they currently live in does not recognize their marriage.
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4. More step parents are eligible for parent PLUS loans : Parents of dependent students and, in most cases, their spouses, can borrow a parent PLUS loan to contribute to the dependent undergraduate student's college education. That definition now includes stepparents in a same-sex marriage that is legally recognized in the state in which they were married.
5. Applying for income - driven repayment plans as a family : Under most of the income-driven repayment plans, such as income-based and income-contingent repayment, the income and any federal student loan debt of the borrower's spouse is taken into consideration when determining the payment amount.
Consistent with the other changes we've mentioned, the Supreme Court ruling means that as long as the couple's marriage is recognized in the state or foreign country they were married in, they will also be recognized as spouses for the purposes of these payment plans.
Betsy Mayotte, director of regulatory compliance for American Student Assistance, regularly advises consumers on planning and paying for college. Mayotte, who received a B.S. in business communications from Bentley College, is a frequent contributor to ASA's SALT Blog; responds to public inquiries via the advice resource "Just Ask;" and is frequently quoted in traditional and social media on the topics of student loans and financial aid.
