Thanks for the clarification.
The main point I was trying to make is not that grad students should borrow, but that the FAFSA/financial aid system is built around the assumption that they can borrow – so more often than not, the college is going to view a parent’s decision to fund graduate level education as a discretionary expense. (Yes, mom and dad can choose to pay for D1 to attend medical school – but they can also choose to allow D1 to rely on loans and use their own funds to pay for D2 to attend undergrad. Most undergrad schools don’t want to subsidize the parent’s choice to help the older sibling.)
My general observation has been that there are a small number of universities that expect graduate and professional students who are seeking institutional aid to also submit parental financial information, and those schools may be the ones who have decided that parents ought to fund grad students, and may be more likely to take a graduate sibling into account when making financial aid determinations at the undergrad level.