Does Filing a FAFSA Obligate You in Any Way? Are Parents Responsible for Repaying a Child's Student Loans? (2024)

most other forms of financial aid.The FAFSA is a prerequisite before your child can get student loans,such as the Federal Perkins loan and Federal Stafford loan. Only thestudent is obligated to repay these loans. Parents are not responsiblefor repaying their children's federal student loans and cannot cosignthese loans. If the child defaults on a federal student loan loan,only the child's credit is ruined. Federal student loans are notreported on the parent's credit history.

Parents are not responsible for repaying their child's federal studentloans even if the child is or was underage. Federal student loans arenot subject to the defense of infancy, per sections 484A(b)(2) and (3)of the Higher Education Act of 1965.The FAFSA is also a prerequisite for the Federal Parent PLUS loanstarting with the 2011-12 award year. The Parent PLUS loan is borrowedby the parent of an undergraduate student to help pay for thestudent's college costs. Only the parent is responsible for repaying aParent PLUS loan, but there is no obligation to borrow a Parent PLUSloan. (Some parents will enter into a side agreement with their childwhere the child agrees to make payments on the parent's Parent PLUSloan. But late payments on a Parent PLUS loan will still be reportedon the parent's credit history.)Private student loans, also known as alternative student loans, oftenrequire a cosigner such as a parent. If a parent is willing to cosigna loan, it increases the student's chances of getting the loan and mayyield a lower interest rate. Eligibility and interest rates are basedon the higher of the two credit scores. But a cosigner is aco-borrower, equally obligated to repay the loan. Late payments anddefaults on a private student loan are reported on the credit historyof both the student borrower and the cosigner. Often lenders ofprivate student loans will start seeking payments from the cosignerafter the student is just a few days late in making a payment. Evenif all of the payments are made on time, the cosigned loan will stillshow up as an obligation on the cosigner's credit history. This cansometimes affect the cosigner's ability to get additional credit, suchas a home mortgage, since the cosigned loan will be counted in thecosigner's debt-to-income ratios.But submitting the FAFSA does not obligate you to borrow a Parent PLUSloan or to cosign a private student loan. Only if you sign a MasterPromissory Note (MPN) for a Federal Parent PLUS loan or cosign thepromissory note for a private student loan will you have anyobligation to repay that loan. The promissory note is a legal contractbetween the borrower/consigner and the lender, in which youagree to repay the loan. If you do not sign a promissory note, you arenot obligated to repay the loan. If you do not file the FAFSA, your child will not be eligible for mostforms of student financial aid, such as government and college grantsand student employment programs like federal work-study. The collegecannot grant a student a dependency override just because the parentsrefuse to complete the FAFSA and/or because the parents refuse toprovide support, even if the student lives on his/her own and isself-supporting. The college's financial aid administrator does havethe authority to offer a dependent student unsubsidized Staffordloans if the parents have refused to complete the FAFSA and have endedfinancial support for the student. But this student will not beeligible for other forms of financial aid.

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