Just went through this exact same situation with my daughter's FAFSA last month! The wording is definitely confusing. Like everyone else has confirmed, "student tax filing status" means YOUR DAUGHTER specifically, not you as parents. Since she made $3,500 (well under the $12,950 threshold), select "Will not file" for her tax status. The FAFSA will ask for her income separately later in the student section - just enter that $3,500 from her W-2. Your parent tax info gets entered in a completely different section. One tip: print out or screenshot each section as you complete it. The new FAFSA sometimes kicks you out and it's helpful to have a record of what you've already entered. Good luck with the rest of the application!

I just finished my daughter's FAFSA last week and had this exact same confusion! The "student tax filing status" question definitely refers to YOUR DAUGHTER only, not you as the parent. Since your daughter made less than the $12,950 filing threshold, you should select "Will not file" for her tax status. Don't worry - the FAFSA will still ask you to report her $3,500 summer job income in the student income section later on. They separate student and parent financial information into different sections of the application. One thing that helped me was to think of it this way: anywhere it says "student" it means your child, anywhere it says "parent" it means you. The application keeps these completely separate. Your parent tax information and income will be requested in the parent section (Section 4 I believe). Hope this helps clear up the confusion - the wording really could be better!

Thank you all for the helpful responses! I've collected the info and talked it through with my parents. We're going to start the consolidation process next month and then apply for ICR. It's disappointing that Parent Plus loans don't qualify for the better income-driven plans, but at least there's some option to make the payments more manageable as they approach retirement. I'll make sure they complete both steps correctly so we don't waste time getting denied.

Just wanted to add one more consideration that hasn't been mentioned yet - the timing of consolidation matters if your parents have made any payments already. When you consolidate Parent Plus loans, you lose credit for any payments made toward potential forgiveness programs, but you also get a "fresh start" on the repayment timeline. Also, while ICR isn't as generous as other income-driven plans, it's worth calculating whether the 25-year forgiveness timeline might actually work in your parents' favor if they're approaching retirement. Sometimes the math works out better than trying to pay off the full balance, especially if their post-retirement income will be lower. Make sure to use the Federal Student Aid repayment estimator tool before making the final decision - it can help compare what they'd pay under standard repayment vs. ICR over the life of the loan.

Regarding scholarship displacement that someone mentioned - that's generally only true if you're already receiving 100% of your demonstrated need. With your SAI and the cost of attendance, you'll likely have unmet need at most institutions, meaning outside scholarships would actually reduce your out-of-pocket costs rather than displacing institutional aid. It's still very much worth pursuing outside scholarships in your situation.

One thing I haven't seen mentioned yet is that you should also look at the Common Data Set (Section H) for each school your daughter is considering. This publicly available document shows exactly what percentage of need each college typically meets and what percentage of aid is grants vs. loans. For example, you can see if School A meets 85% of need with 70% grants/30% loans, while School B meets 95% of need with 90% grants/10% loans. This data can help you predict which schools are more likely to give you a better aid package with your $36,600 SAI. You can usually find these by googling "[School Name] Common Data Set 2023" - it's been a game-changer for our family's college planning!

Congrats on getting that sorted out! $12,000 is a huge reduction - that's going to save you so much money in the long run. Parent PLUS loans have such high interest rates that every dollar you don't borrow is money saved. Smart move figuring this out before disbursement too. Your future self will definitely thank you for this decision!

That's fantastic news, Connor! You made a really smart financial decision there. Reducing by $12,000 is going to save your family a significant amount - not just in interest over the years, but also in origination fees right off the bat. Parent PLUS loans can really add up with that 6.84% interest rate, so every dollar you don't borrow is money in your pocket. It's great that you caught this before disbursement too - makes the whole process so much cleaner. Best of luck with your campus job at the rec center!

just remember 2 submit by the deadline! my buddy missed it last year n got zero aid even tho his fam is broke

One more thing to keep in mind - since your dad just retired and is now on Medicare, make sure you understand how his health insurance premiums are handled. Medicare premiums that are deducted from his Social Security checks don't get reported separately on the FAFSA, but if he pays any supplemental insurance premiums out of pocket, those aren't deductible on the FAFSA either. Just wanted to mention this since I see a lot of confusion about health insurance costs for retirees. The main thing is getting his income and assets reported correctly, which it sounds like you've got figured out now thanks to everyone's help!