By now, you've probably heard a lot of advice regarding scholarships, deadlines, free money and loans. But while there are many sources offering tips on these topics, not all of them are reliable. Some might even be based on common financial aid myths. So before you take any advice — or make any major decisions regarding your financial aid for college — familiarize yourself with what’s reliable (and what’s not).
Myth: Our income is too high to qualify for financial aid.
Student and family income is not a factor when a school decides if a student qualifies for a federal unsubsidized Stafford loan. What about other aid? The only way to know for sure is to fill out the Free Application for Federal Student Aid (FAFSA).
The federal government has a formula that considers a number of factors — including number of college-age children, income, and children’s assets — to determine the amount a family is expected to contribute to a child’s college costs. Any costs above that can be covered by financial aid, government aid, or private loans.
One more reason to fill out the FAFSA: some schools will not consider applicants for college grants and scholarships if they have not applied for federal aid.
Even if you’re doubtful about your qualifications for financial aid, applying doesn’t hurt. You never know — you could get some help to finance your education.
Myth: We have money saved for our child's college education, so we won't get any aid.
False. Student and family savings is not a factor when a school decides if a student qualifies for a federal unsubsidized Stafford loan. And when it comes to other aid, the federal formula has allowances for savings and assets. You are not expected to sacrifice your home equity or retirement savings to pay for your child's education.
Only a small percentage of parental assets are expected to be contributed for education.
Myth: Our daughter wasn't eligible for much financial aid last year, so our son entering college this year won't be eligible either.
On the contrary: The number of family members in college has a big impact on your financial aid eligibility.
Myth: Our child will be attending college part time, so he won't be eligible for financial aid.
Financial aid is available for part-time students. Ask your college's financial aid office for information on aid for part-time students.
Myth: You can get more federal money by shifting your assets around.
Almost anything you do to lower your Estimated Family Contribution (EFC) will have an impact on your personal income, assets, and taxes.
Don't bother with financial strategies that may result in tiny increases in financial aid (and may be offset by higher taxes or lower asset levels). Instead, focus on getting your taxes done early and correctly.
Financial aid myths: the bottom line
Dig around and get the truth from reliable sources. High school counselors and financial aid administrators are professionals who are there to help your family — and they’re great sources to turn to for reliable information regarding financial aid.