Yes, your outcome at this college could be affected by your family debt. If your brother alone owed the college money, this might not be the case. But if your parents are involved — and you expect their financial support when you matriculate — then the college folks are likely to connect you to your brother and may not admit you if your parents are in arrears.
Your parents would be wise to settle their account with this college — not only because it will impact your future there, but more importantly, because your brother will not be able to enroll elsewhere without an official transcript. And the college will not send out a transcript until the debt is settled. If your brother has already matriculated elsewhere by not reporting his earlier attendance at this college, he has done so dishonestly, and it could catch up with him. If it does, he could lose his place (and all his credits) at the subsequent school.
If, however, your parents contact your brother's first college immediately and set up a payment plan, it's possible that this college will not use the debt against you ... as long as your parents appear to be meeting the terms of the plan in the months just ahead. If there are compelling circumstances for the ongoing debt such as a serious illness, a lost job or a divorce, college officials can be especially understanding.
Of course, it's conceivable that your application to this college will slip by without any of the busy staff noticing your connection. However, you must report your brother's attendance on your application when asked about your siblings. If you omit this, you, too, could be in danger of the severe penalties that come with application dishonesty. But even when you do disclose your brother's time at this school, it's possible that admission officials won't follow up and check his record.
Nonetheless, if your parents refuse to repay this school or to at least to begin the process, I suggest that you contact your regional admissions rep there right away and explain your situation. Although this will eliminate the possibility that your relationship with your deadbeat brother will go unnoticed, “The Dean" thinks that it's still the wisest route. Should you slide under the radar now, get accepted, and maybe even be offered a scholarship, the college might connect you with your brother later on and pull the plug on your grant (and even on your acceptance) when it's too late for you to make new plans.
If you have alternate means to finance your education (e.g., your grandparents — aware of the default on your brother's college payments — have offered to cover your college costs) then you should certainly tell the admission officials, although this sounds to “The Dean" like a huge long shot. Moreover, this college may still refuse to accept you due to your parents' outstanding balance.
I'm sorry that your family has put you in this situation. But there are surely many other colleges where you could be happy and successful, so your best bet could be to aim for these other options instead.
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