I don't think they care about debt but they do take into account yours and your son's savings and any business interests that you own. Also how many children you have that still need to go through college. I'm sure a number of schools have calculators on line but I know that Amherst has one. They say it is just a guideline but it gives you an idea. As for why they want you to do it, they want to use as little scholarship money as possible. My son was recruited by a private Big XII school and one of the big reasons was he was eligible for an academic full ride. He chose to go the route of $50k a year school. Oh well.