Tuesday, April 30, 2013

Financial aid changes for children of same-sex (and other unmarried) couples

I have consistently pointed out that marriage and parentage are two separate matters and that parentage for two same-sex parents can exist regardless of marriage.  I also say (repeatedly) that marriage shouldn't be the bright dividing line between who is in or out of any law or regulation.

Well, comes the Department of Education taking both these principles to heart.  If you have college-bound children, listen up.  The DOE is changing the way it calculates the income available to a student when considering how much financial aid s/he is eligible for.  Now when a child has two parents, not married to each other, and those parents live together, the income of only one parent is counted.  In the future, the financial aid application (FAFSA) will collect income information on both parents.  The new application will also use gender neutral terminology (like "parent 1" and "parent 2").

This makes sense to me.  Although most states end the obligation to support a child at 18, the government assumes for all children that those whose parents have more income should qualify for less financial aid.  That leaves more for those whose parents cannot contribute as much, even if they would like to.  Given that reasoning, all parents should be treated alike.  It is parentage, after all, that creates whatever legal obligations do exist, and it is incoherent to treat student A, whose parents live together and earn $50,000 and $30,000 respectively, differently from student B, whose parents live together and earn $50,000 and $30,000 respectively, simply because student A's parents are married and student B's parents are not.

The new regulations will apply to children with unmarried heterosexual parents and with same-sex parents, married or not.  (Again, the parents must live together.) The press release explains, rightly so, that this new approach does not violate DOMA because it turns on who the child's parents are, not whether those parents are married under federal law.  Years ago, under a Republican administration, the Justice Department found that it is not a violation of DOMA to allow a child to get benefits from Social Security as a result of the disability of the child's nonbiological mother in a Vermont civil union with the child's biological mother.  The significant legal question was whether under state law, the child could inherit from the nonbiological mother under the rules of intestate succession.  The answer to that in Vermont was yes, and that was that.

This FAFSA change will not be wrinkle free for same-sex couples.  I don't think all couples know whether they are both legal parents.  If they have done second-parent adoptions (or gotten parentage judgments), they do.  But in a number of states parentage exists without a second-parent adoption based on statutes concerning children of donor insemination or those based on "holding out" a child as one's child or otherwise functioning as a parent.  How are those parents supposed to understand distinctions that sometimes baffle lawyers? I'm guessing the DOE thinks that if a lesbian couple is married or in a civil union or comprehensive domestic partnership, then both are parents.  But how about the couple who lives in Virginia, where there is no relationship recognition, but married in DC?  Will DOE count them both as parents?  That doesn't exactly seem right, since presumably if a Virginia nonbio mom dies her child does not inherit by intestate succession.

I mean, really, those of us with deep expertise in this area of law sometimes cannot be sure if someone is a child's legal parent. It's unrealistic to think that individual parents will always know this.

Then again, the FAFSA does not reflect legal obligations (since most states end the support obligation at 18), so why will two couples be treated differently depending on whether both people functioning as parents are considered legal parents in their state?  It's odd to think that a child whose family lives in a nonrecognition state where second parent adoption is not allowed (let's take North Carolina) will qualify for more financial aid than a child in whose family has the same exact income but lives in a state where the parents were able to do a second parent adoption (let's take New Jersey).

There is one other point worth considering.  Will there be families who are financially disadvantaged because the couple's marriage is not recognized under federal law who will nonetheless have both incomes counted for their child's financial aid?  When both parents earn the same amount of money the FAFSA will show much more parental income.  But that couple actually does better being unmarried under federal tax law.  When one parent earns almost all the income, the couple would do better filing federal taxes as a married couple, but they also won't have a lot more income to count adding the second parent's income to the FAFSA.

For the moment I am giving a thumbs up to the administration on this.  They are rightly focussing on parentage, not marriage.  Here is the press release.  Proposed regulations will be out this week.  then we'll know more.

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