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<p>I don’t know where that comes from. Nobody is obligated to take on any federal loans, US resident or not. Applicants can contribute their EFC from whatever source they wish. </p>
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In most countries I know (certainly throughout Europe) , tax rates are significantly higher than in the US, so non-resident US citizens who do not file US tax forms actually do not owe any back taxes as they get full credit for the taxes they pay in their country of residence. Many US citizens permanently residing abroad with no intention of returning simply stop filing US forms because of the complexity of the process, having to hire an accountant, to find out in the end that they owe nothing. </p>
<p>My main point is that there is no legal requirement for a non US resident to file a FAFSA or US tax forms to be eligible for institutional aid (as opposed to Federal aid). For schools that do not meet full need, the applicant may possibly get less aid than a similarly situated US applicant if he could have been eligible for Federal aid, but it certainly won’t act as a bar to financial aid altogether as some seem to imply.</p>