Learn about parents' role in the federal student aid process.

Find out how to help parents understand financial aid.


As students work their way through the financial aid application process, their parents worry about such issues as the affordability of schools, whether they'll qualify for loans, and the privacy of FAFSA data.

Most families find the financial aid process mystifying and overwhelming and, unfortunately, many rely on inaccurate information from well-meaning friends or acquaintances. Parents need to know that this whole process is made more manageable because it all begins with the Free Application for Federal Student Aid (FAFSA®) form.

Here you'll find information and tips you can pass on to parents to help them understand their role in their child's financial aid application.

How can parents make college more affordable?
How can parents find out whether they will qualify for loans?
Why do parents have to be involved when it's the student who's applying for federal student aid?
What parent information is reported on the FAFSA® form, and is it kept private?

How can parents make college more affordable?

Many parents believe a college education is out of reach for their child. Reassure them that a great number of financial resources can help make the dream of a college degree a reality. The key is planning ahead and learning about the financial aid process. Here are some things parents can do to bring college costs within reach:

  • Save. State-sponsored college savings plans and prepaid tuition plans are available and are more effective the earlier parents start saving.
  • Plan ahead based on an estimate of financial aid. FAFSA4caster provides an estimate of how much federal student aid a student might get if he or she applied today. You might recommend students or parents use FAFSA4caster as early as middle school to make them aware of what's available and compare possible aid to the cost of colleges in which they're interested.
  • Get free money to help pay. Enlist parents' help in encouraging students to look for scholarships early—ideally, in spring of 11th grade or the summer between 11th and 12th grades. The more scholarships a student gets (even if each one is small), the more affordable college is.
  • Compare colleges for the best deal. The College Scorecard offers a way to assess not only a school's affordability but also its value for money. You can find scorecards for colleges based on factors such as programs or majors offered, location, and enrollment size.

Talking points:

  • Students should apply for aid even if they and their parents don't think they'll be eligible. Even if the assistance they receive is nothing more than an unsubsidized loan, the interest rate on the loan may be less than what they would pay on a private loan.
  • Tuition is not the whole picture; a student shouldn't rule out a school until he or she knows what the net price will be after financial aid is taken into account.
  • When considering loans to help pay for postsecondary education, parents need to be as upfront with their children as possible. Everyone should be aware of what they can afford and how much they are willing to get in debt for.

FAFSA4caster(Result Type: Web Resources and Tools)
Description: Financial aid calculator that gives an early estimate of eligibility for federal aid and helps students understand their options for paying for college.
Resource Type: Web Resources and Tools
Also Available in: Spanish(Result Type: General)
Related: FAFSA on the Web(Result Type: General)

College Preparation Checklist(Result Type: PDF)
Description: Checklist that helps students (elementary, middle, and high school), as well as adults and parents prepare financially and academically for college. [7.3 MB]
Resource Type: Handouts
Also Available in: Spanish(Result Type: PDF)


How can parents find out whether they will qualify for loans?

Whether a student is starting at a community college to later transfer to a four-year school, or he or she is trying to decide between a public or private college, the cost of school can be daunting, but most families do qualify for some form of aid.

  • FAFSA4caster will give an early indication of how much federal student aid, including loans, the student might qualify for.
  • To supplement the aid the student receives, parents can apply for a Direct PLUS Loan, which is made to the parent to help cover costs for the parent's dependent child. A parent can estimate how much in Direct PLUS Loan funds he or she will receive by using this formula: Cost of Attendance − Other Financial Assistance Received = Eligibility for PLUS Loan.
  • Although a student does not need a credit history in order to get a federal student loan, a parent's credit record will be checked when he or she applies for a Direct PLUS Loan. If you find that a parent is concerned that he or she may not qualify, you can reassure him or her that a borrower with an adverse credit history can obtain an endorser or document extenuating circumstances.
  • If a parent is unable to obtain a Direct PLUS Loan, the student may be able to get additional Direct Unsubsidized Loan funds. Tell the student to contact the college financial aid office to ask about this option.


Why do parents have to be involved when it's the student who's applying for federal student aid?

The FAFSA form was designed to provide a picture of the family's financial strength. If a dependent student is applying for federal student aid to help pay for college, the parent's financial information is required on the FAFSA form. Providing information does not commit the parent to contributing anything toward the student's education; it is simply required for the assessment of the family's situation.

We recommend you send students and parents to StudentAid.gov/dependency for answers to their questions about dependency status and what to do if the student has no access to the parent's information.


What parent information is reported on the FAFSA® form, and is it kept private?

Parents must include tax, income, and some asset information on the FAFSA form. They must also obtain an FSA ID to serve as their electronic signature for the financial aid application process.

Assets not included in the financial aid calculation include personal property, annuities, cash value of life insurance, retirement accounts, and 529 plans owned by people other than the student or parents.

The information reported by students and parents on fafsa.gov is encrypted (scrambled using a mathematical formula) so it is unreadable by anyone who might intercept it. Additionally, the U.S. Department of Education does not sell student or parent information and does not share that information with any entities beyond those specified on the FAFSA form: the schools the student lists on the FAFSA form, the state agencies of the states in which those schools are located, and the state agency in the student's state of residence.

Talking points:

  • The income and assets of the student are weighed more heavily than those of the parents in the assessment of the student's eligibility for federal student aid.
  • The parents' home equity is not considered in the FAFSA form. Parents shouldn't allow lenders to persuade them to draw equity out of their home (usually to purchase expensive investments or insurance) in order to “qualify” for more aid.