How Living with Grandparents Can Affect Student Aid

About four million children live in grandparent-grandchild households, according to RAND Corporation (a non-profit agency that addresses challenges facing the private and public sectors). These are households that consist of grandparents (or a grandparent) and grandchildren only, rather than three-generation households: those with grandparents, parents and grandchildren.

Children are living with their grandparents for a variety of reasons. Their parents may be in jail or a mental institution, addicted to drugs or alcohol or even deceased. In some cases, parents have neglected or abandoned their children and grandparents are forced to become parents a second time.

So what happens when these children are no longer children and its time for them to go to college or a trade school? Who pays for it and how do they pay for it?

Like most students, regardless of who they live with, those who live with grandparents will probably get the lion's share of their funding from federal student aid programs. But one of the basic assumptions underlying federal student aid programs is that parents have the primary responsibility for paying for their children's education. Federal student aid is intended to pay what the parents cannot pay.

Regardless of whether students live with their parents or not, they are generally considered dependents of their parents until they are 24 years old. As a result, the parents income (along with the student's) must be considered when determining the student's eligibility for aid. (If a student is independent, only the student's income is considered.)

A student is not considered independent of his or her parents just because the student lives with a grandparent or grandparents, nor is that student considered a dependent of his or her grandparent(s) unless a grandparent has legally adopted the student.

Dependence or independence is determined according to criteria that Congress established when the federal student aid programs were set up. For the 2006-07 academic year, a student is considered an independent student if he or she meets as least one of the following criteria: