If their father lives in the same school district, it can depend on who's more or less affluent, but if he lives beyond the boundary, then the step parent will be the "new" father for financial aid purposes. In the 34 years that I've been working with separated and divorced parents, there are numerous legal ways to qualify any family for maximum financial aid.
There are several factors that come into play when determining financial aid for separated or divorced parents. The most significant of which is the designation of the custodial parent. Only the designated custodial parent's income and/or assets need to be listed on the FAFSA, and there's still plenty of time to do asset repositioning before it's submitted in early 2014. Thus, the designation of the custodial parent ultimately determines a separated or divorced family's financial aid eligibility.
Note: In the financial aid formulas, the designated custodial parent is not necessarily the same as the court designee, but rather the parent who will receive the financial aid package and the bill for the student.
Additionally, the divorced custodial parent who is planning to remarry needs to be aware how their new spouse's income and/or assets will affect their chances of qualifying for maximum financial aid. This could prove to be very costly, if the new parent has a substantial income and/or a large asset base. However, if their income and assets are modest, and they bring additional children into the marriage (especially ones in or about to enter college), there could be a windfall of financial aid!
Reecy Aresty, a noted college financial aid expert and lecturer since 1977, has helped thousands of families protect their assets, increase their wealth, and reduce their taxes. Reecy focuses on the College Admissions and Financial Aid Process to help families legally cut the cost of college by as much as 90%! Visit his website for more information.