5 Myths About Financial Aid for College
Think you’ve got the whole college financial aid thing figured out? Or, do you feel like your lost in a dense fog? No matter where you’re at in your decision process about paying for college, it’s always worth applying for financial aid. You might not receive the help you want in paying for college, but there’s always a chance that financial assistance is available. Knowing the facts and following through on applications for financial aid packages can make the difference between getting an education and abandoning your future career dreams. Here are five financial aid myths and corresponding facts that shouldn’t keep you and your family from giving it a shot.
Myth 1– Income level drives all financial aid packages for college students.
Fact – Not all programs are based on income. For example, you can qualify for a Stafford loan regardless of your family’s income. The school your child applies through makes the decisions on these unsubsidized loans. To qualify, however, your child must fill out a Free Application for Federal Student Aid (FAFSA). If a parent applies for and is denied a Federal Direct Plus Loan, the student is eligible for more unsubsidized Stafford loans.
Myth 2 – Students hoping for scholarships must fill out a FAFSA form for all potential scholarships and grants.
Fact – Some organizations require it, and some don’t. Have your child read all college scholarship and grant application forms carefully. As boring and complex as they can be, the fine print will explain what must be sent in with the award application. A FAFSA is typically required for scholarships through colleges and universities and for many financial need-based programs. Federal aid eligibility requirements are influenced by a litany of rules, such as citizenship and academic progress. Private organizations, employers and associations, however, often give away money based on other guidelines, including essays. In these cases, FAFSAs often aren’t required.
Myth 3 – Putting away too much money in savings knocks out financial aid for college students and their families.
Fact – Simply put, it’s not true. There are savings allowances built into eligibility for various financial aid programs. The amount of savings you have may or may not affect actual eligibility, and there’s no ceiling. Savings can affect how much is disbursed for a student’s aid package, but it’s one of several factors used. Each program is different, so read the requirements and guidelines when you’re filling out the forms.
Myth 4 – Students are limited to sending a Student Aid Report (SAR) list to only 10 schools, period.
Fact – In reality, students can list up to 10 schools to receive copies of a SAR on FAFSA forms. Your student can always add more schools later. The schools listed on the form can typically access the financial information within 24 hours from when it’s processed. How long it takes to process the FAFSA form depends on whether your child submits it in paper or electronic forms, and whether or not all of the information is correct and complete.
Myth 5 – Whether or not one of your children goes to college won’t affect the financial aid eligibility of the others.
Fact – How many college-age children you have actually has an impact on financial aid. The Expected Family Contribution (EFC) is calculated based on the number of people in your family, how many are in college, total assets, and what the overall earned income is as reported on the FAFSA. The EFC impacts how much financial aid each individual student in your family receives.
When it’s time for your family to consider financial aid for college, don’t be intimidated by the idea of asking for assistance. You may be surprised at what’s available.
Photo courtesy of: 401(k) 2013