When it comes to the financial aid process, parents often fall into one of two categories: over-doers or non-responders. And while the former is better than the latter, those moms and dads may actually help less than they think they are—especially in the long run.
Parents definitely have a job in the student aid and loan processes, but they can't take them over entirely from the student. To ensure you don't, here are some dos and don'ts for parents during the financial aid process.
For Dependent Student Financial Aid Applications
DO: Provide demographic, income, asset, and household size information. Parents of a dependent student should provide this information and their federal tax return information, as the student's information alone won't be enough to qualify him or her for most forms of financial aid. (Check out this article to figure out which parent or parents' information is needed.)
DON'T: Refuse to provide parent information on aid applications. If the school asks for your information on the Free Application for Federal Student Aid (FAFSA) or any other aid application, provide it. Doing so won't make you responsible to pay for the education, but if you don't, you will make your child ineligible for Pell grants, subsidized Stafford loans, and other forms of financial aid.
DO: Sign the FAFSA. The application is incomplete without a parent signature, and not signing will hold up the child's aid.
DON'T: Complete the FAFSA by yourself. Many students graduate without knowing how they paid for school—or that they even borrowed student loans. Completing the FAFSA is the first step of their ownership in paying for college, so if you help with this application, make sure you do it with the student and not on your own.
For Independent/Graduate Student Financial Aid Applications
DO: Provide any parent information the school asks for. This will allow the school to evaluate if an independent student is eligible for institutional aid or other forms of financial aid, such as Health Professions Student Loans (HPSL) or Loans for Disadvantaged Students (LDS).
DON'T: Provide your demographic, income, asset, or household size information on the FAFSA. A parent's information isn't required to evaluate if an independent student is eligible for federal student aid.
DON'T: Sign the FAFSA. A parent's signature isn't required for independent students to complete their application.
For Stafford/Grad PLUS Loans
DO: Help the student understand a borrower's responsibilities. The debt the student takes on will be in his or her name, and that obligation means they're responsible for paying it, even if they don't complete their education or get the job they want post-graduation.
DON'T: Sign the MPN or complete entrance counseling for the student. Not only is this fraud, but it also doesn't help the student understand his/her debt obligation.
DO: Endorse a Grad PLUS loan if the student is denied on his/her own. But only do this if you are comfortable taking on the responsibility for the debt in the case that the student stops repaying. If you aren't, this turns into a "don't."
For Parent PLUS Loans
DO: Borrow a Parent PLUS loan if you are comfortable repaying it. This loan is in the parent's name, and you cannot transfer it to the student's name. Only borrow this loan if you intend to pay for the student's education and can manage these costs with your other life goals.
DON'T: Sign for a Parent PLUS loan if you expect the student to repay it. They certainly could! However, the debt obligation is in the parent's name, so if your child fails to make any payments, that negative action will affect your credit history, not the student's.
For Accessing Loan Information
DON'T: Contact the student's school or loan holder for information about loans in the student's name. The Family Education Rights and Privacy Act (FERPA) doesn't allow parents to access loan information in the student's name unless the student officially gives the school or loan holder permission to share the information with the parent or the parent endorsed the loans.