Should Parents Be Part of the Student Aid Equation? An Argument for a Level Playing Field
August 13, 2014

In order to complete your FAFSA, you have to submit your parents’ tax returns. What happens if your parents won’t give them up and why do your parents’ finances matter when you’re 18 (or about to be)? You’ll be the one benefiting from your college education and on the hook for any student loans you sign on for, so why are the ‘rents in the equation? Let’s discuss…


Should parents’ finances be part of the student aid calculation?
Image Source: Flickr Creative Commons User Prin Zebest

#1 Their Money Isn’t Your Money

No matter how much (or little) money your parents have, they aren’t obligated to use any of it to pay for your education. I was a scholarship kid whose parents didn’t have any money to kick in toward my schooling. My hubby, on the other hand, had a wealthy lawyer dad who chose not to contribute toward his education because he was blowing a pile of money on his new, young wife. The upshot was that both of us were footing the bill for our college, but I was at an advantage because my parents were low income earners. Shouldn’t it be the financial reality of the student that matters?

#2 Your Debt Isn’t Their Debt

Another factor is that you are the one who signs on for your student loans (assuming your parents don’t take out PLUS loans). You’re not required to have a cosigner for federal loans – this debt is 100% yours. Although anyone can take out federal loans, independent students can borrow $26,500 more than dependent students. If your parents still claim you on your tax returns, you’re considered a dependent. Increasingly, though, students are on their own after high school and perhaps all should be classified as independent students for purposes of student aid calculations.

#3 You Can’t Make Your Parents Give You Their Financial Information

My hubby’s dilemma was that his father refused to hand over his tax returns for his FAFSA. He didn’t want anyone to know how much money he was making in the aftermath of a bad divorce and this cost my hubby access to Pell Grants and student loans. His granddad stepped up to help pay but when he passed away, that resource was gone, as well, and he had to drop out of college until he established himself as an “adult” and could take out student loans without parent info to pay for school. The law has changed now and if parents refuse to help complete the FAFSA, students can get unsubsidized Stafford loans, but are not eligible for Pell Grants and other need-based financial aid.

#4 You Are the Beneficiary of Your Education, Not Your Parents

Ultimately, your education benefits you and not your parents, so you footing the bill for it makes sense. And you may want to ask yourself whether your parents should help you. If they’re loaded, that’s a no-brainer, but what if they’re not? Do you still have siblings at home for them to support? Will they have to borrow against their retirement funds or drain their savings to help you get through school? Should your parents put their future financial security at risk to pay for your college? Your parents are on the road to retirement and need every penny. As it is, most adults aren’t saving enough to cover their costs of living as they age and raiding this already-insubstantial cache to pay for your school is dangerous.

A Level Playing Field

Creating a level playing field for student financial aid is tricky. Some students with high earning parents are no better off financially than those with low income parents. Perhaps taking the parents out of the equation completely won’t adequately level the field, but ignoring that there is a great disparity in how parents participate in financing college also doesn’t make sense. We’d love to hear your thoughts on what should drive financial aid and how (or if) parents should factor into the equation.

If you’ve got student loans, sign up for’s free student loan tool to help you visualize, optimize and strategize to pay your debt off sooner. Also, read our blog often for updates on student loan legislation, tips on dealing with loans and loads of great financial advice.