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MYTHS ABOUT FINANCIAL AIDSince this week’s Beyond South meeting on Wednesday night is about financial aid it seemed appropriate that this week’s College Tip have the same focus. The Myths about Financial Aid is a column I have used before and one that I have altered very little because it says it all as it is.

1. If a college costs too much, don’t even consider it.

Yes, total expenses at some colleges are more than at others. But keep in mind that it is usually the tuition costs that differ, most other costs are about the same. In-state public school tuition is cheaper since taxpayers subsidize it, however room and board is not all that different from that of a private school. Private colleges have different and more sources of financial aid, and there is often more flexibility in awarding it. A key point is that the greater your overall college expenses, the greater the possibility of demonstrated eligibility for financial aid.

2. There are millions of dollars of scholarship money that goes unused every year.

This claim has never been verified. It is usually espoused by scholarship search services. Beware: If you are asked for money by a scholarship search service, don’t do it.

3. There isn’t as much aid as there used to be.

Yes and No. As college costs have risen, so has the amount of money available. However, since there are more students who need financial aid attending college the money is spread over more students, so there is a chance that each student will get less. In addition the proportion of gift aid and self-help has shifted: loans and work-study make up a larger percentage of the aid package.

4. If your income is too high, there will be no chance of qualification.

Not always true. Although income is certainly a key factor others are taken into account: high medical expenses, lack of assets, the number of family members in college at the same time, private elementary and/or secondary school tuition payments.

5. Living at home during college can save money.

Yes, but not as much as you might think. Food and utilities used at home need to be considered along with commuting costs (car maintenance, insurance, gas, parking fees). In addition, think about the non-quantifiable pluses of having your student be more independent earlier and if you are lucky maturing at a faster rate.

6. In order to send a student to college one must sell the house or youngest child.

Don’t put up the For Sale sign! The federal student aid programs (FAFSA) don’t even consider home value when determining eligibility. Colleges (PROFILE) may consider your home equity, but they do not expect you to sell the family home in order to pay for college. The larger portion of what is expected as the family contribution comes from your income, not your assets. And keep that younger child! When it is his/her time to go to college you will be in a better position to qualify for more aid.

7. Don’t save for college, you will get more aid.

Not true. Actually what it means is that a larger chunk of the college cost will come out of your daily income, your student will have high loan payments upon graduation and you will have many sleepless nights.

8. “A” students can’t get aid.

Yes and no. Grades are not considered when demonstrated financial need is determined. However, in addition to being eligible for aid because of financial need, an “A” student can apply for merit aid. However, a surprise to prepare yourself for is that if your child is not a genius (or close to) he/she will probably not qualify for merit aid at the very top tier schools. On the other hand, if you are an “A” student a second tier school may try to attract you away from a top tier school with a more attractive financial aid package.

9. The early bird gets the worm – or at least more of it.

It is not so much that the early bird gets the worm, as it is that the late bird gets less of the worm. It is important to send accurate complete FAFSA and PROFILE forms in as soon as they are requested. Not doing so can delay your application. The money is awarded on a first come, first serve basis.

10. A financial advisor is needed because it is so complicated.

Not so. The instructions that accompany both the FAFSA and the PROFILE are detailed and comprehensive. The trick is to gather all the necessary documents before addressing the forms and leave enough time. If you rush, you may make mistakes that will lose you time and maybe money. Parents of seniors should be gathering their information now if they haven’t done so already. Don’t be afraid to contact a college financial aid office for assistance with questions. That is their job.

11. Colleges will bargain with families about aid decisions.

Yes and no. Although many colleges will listen to an informed and data based appeal, they will not bargain. Most financial aid officers are governed by strict campus policies, however they can use their professional judgment to make warranted adjustments. If you have new special circumstances, let the college know, but don’t have a “let’s make a deal” attitude.

12. All colleges cost too much.

Yes, colleges cost a lot of money, but not all college tuitions are in the stratosphere. Believe it or not, very few colleges are truly high-priced. The media focuses on the high priced schools (over $30,000 tuition and fees), but only about 4% of students go to those schools. 80% attend lower cost community colleges and four-year public colleges. If you do your research you can be accepted at a school you can afford and one in which you can receive an excellent education.
(Based on the excellent book on financial aid by The Collegeboard “Meeting College Costs”)

Judith Christie
College Planning Consultants