Myths About Financial Aid

Information from an excellent book on financial aid by The Collegeboard: Meeting College Costs

All colleges cost too much.
Believe it or not, very few colleges are truly high-priced. The media focuses on the high priced schools (over $20,000 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.

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. Tuition is subsidized at public colleges by taxpayers. At private colleges there is often more financial aid and 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.

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.

There isn't as much aid as there use to be.
Not so. As college costs have risen, so has the amount of money available. However, the truth in this statement is that the proportion of gift aid and self-help has shifted: loans and work-study make up a larger percentage of the aid package.

If the 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.

Money can be saved by living at home during college.
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), pick up meals, etc. In addition, think about the non-quantifiable pluses of the opportunity for your student to mature and become independent more quickly.

In order to send a student to college one must sell the house.
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.

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.

"A" students can't get aid.
Grades are not considered when demonstrated financial need is determined. In addition to being eligible for aid because of financial need, an “A” student can apply for merit aid.

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 loses out. It is important to send accurate complete FAFSA and PROFILE forms in at the right deadlines. Not doing so can delay your application. The money is awarded on a first come, first serve basis.

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 form and leave enough time. If you rush, you may make mistakes that will loose you time and maybe money.

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 approach the discussion in a "let's make a deal" way.