Here is my situation.
My husband and i are divorcing, and we live overseas in the military.
Therefor my 2 kids and i are moving to the denver area soon.
My grandparents offered to let me live in there basement for free/job free if I go to nursing school full time.
So I will pretty much be living off of child support and alimony. My grandparents of course will help and make sure we are fed (with me chipping in alimony funds) but they are not going to pay for daycare.
Can I still get daycare assistance if I am living job free with wealthy family to go to school, but not necessarily being 100% catered too. My grandparents are not free ride, handout kind of people and I am just glad they are letting me live in there basement until I finish my education.
I am just afraid when I apply for child care assistance that there address and money might close that door.
Does anyone know the rules for this in colorado or anywhere?

I went through this and it is HARD, because you have to count everyone in the household. It is a federal thing, not a state thing.

However, good news of a type, as I am a student. You can get your financial aid adjusted to include child care costs. Also, when you fill out your FAFSA, afterwards contact your financial aid office and make them aware of the fact that you are divorcing and that what you made last year will not be accurate. After writing a statement, they will zero out your "family contributions" and then you will get more in grant money and be eligible for more student loans.

Work with the financial aid office because they will tell you everything you can do to get more money.

Also, make sure the office knows you are responsible for 2 kids, this will adjust your living allowance from financial aid.