The definition of independent student that is used in determining eligibility for federal student financial aid is examined, along with potential compliance problems for independent students and differential treatment of independent and dependent students. Major factors for defining independence for students receiving federal financial aid are: whether the student lived with the parent for 6 weeks or more in the year prior to receiving aid, or will live with the parent for 6 weeks in the succeeding year; whether the student was claimed as an exemption or received at least $750 assistance in the year prior to receiving aid or in the succeeding year. For the 1985-1986 academic year, parents must provide a copy of their income tax return to verify that the student was not claimed as an exemption. Problems concern: verifying information provided by applicants, qualifying as independent but not demonstrating either visible means of self-support or a separate household, minimal funds available for older students, the practice of not claiming students as an exemption in order to maximize aid for their students who wish to attend out-of-state colleges, and the status of married students with normal income who apply for financial aid. An example illustrates disparities in financial aid for dependent and independent students. A 21-item bibliography is included. (SW)