I guess I don't know the "real story," but just what she told me. I do see this as a qualification though: "Be a student for whom a financial aid administrator makes a documented determination of independence by reason of other unusual circumstances." Or, perhaps there was some sort of legal thing to make her a foster child and her sister her foster parent/ legal guardian? Ooh, maybe she was secretly married and I didn't know it!
I think that the idea is that people with wealthy parents, on average, do more to support the child going to college than poorer parents, even if that support is emotional, encouragement, knowledge about the college process, financial support only during the summer, better high school education, SAT prep help, etc. My parents didn't help me out with tuition or living expenses either, and I never moved back in with them after I went to college, but I could have. I was offered no "need based" financial aid to my state college, and only unsubsidized loans.
However, because they provided a stable home for my first 18 years, healthy food, a car so I could get a job and go to activities in HS, and encouragement to do well in school and go to college, paid for me to take the SAT, and bought me sports equipment so I could be "well rounded," I got merit based scholarships.
But perhaps unfairness is the first lesson of college: Everyone didn't grow up the same way you did, and everyone has different inborn and circumstantial advantages and disadvantages, and life is incredibly unfair, from here on out!