Top Myths and Mistakes (in Paying for College)

default-loanIf you aren’t concerned about your strategy for paying for college, consider yourself among the lucky few. If, on the other hand, you’re worried about where you’ll find the money you need, or are worried you won’t be able to afford a college education, we’re here to help. There’s a lot of information out there on the process of paying for college, but not all of it is correct — and that’s where we can help. Read on to learn about some of the common myths and mistakes made throughout the paying-for-college process. That way you can make sure you won’t make them yourself, putting you one step closer to an affordable education.

Mistake #1: Thinking there’s plenty of time to deal with the cost issue after the admission decisions have been made.

Paying for college is as equally important as navigating the admissions process successfully. Neglecting the “financial aid side” can result in a very unfortunate outcome: being admitted to your dream school but not having the money to pay for it. Our suggestion: start saving, and work on a strategy for paying for college, as early as possible. Work in high school and save as much as you can. Constantly be looking and applying for scholarships  before, during, and after the admissions process, fill out the FAFSA (Free Application for Federal Student Aid) as early as possible—it’s available January 1st for the following academic year—and always keep your eye out for more sources of money.

Mistake #2: Going it alone—or having a problem paying for college and never talking to a financial aid counselor.

College aid counselors are there to help you. They come up with an initial award that makes it possible for you to attend college, help you stay in school once you are there, and make sure you don’t borrow too much money or pay a higher interest rate than necessary. Talk to them. Let them guide you through the paying for college process. They might be able to adjust your financial aid package or help you find scholarships if you find yourself in need. In other words, remember that financial aid counselors are your friends and not your enemies, and they can help you develop a successful strategy for paying for college.

Myth #1: The most common form of college aid is a scholarship based on the student’s academic ability or talent.

For better or worse, this simply isn’t true. By far the largest amount of financial aid given to undergraduates is awarded based on demonstrating financial need. After adding in federal student loans and work-study jobs, more than 90% of all financial aid goes to needy students. That means you don’t necessarily have to be at the top of your high school class, or have an otherwise flawless academic transcript, to qualify for and receive the financial aid you need to attend college. Focus on demonstrating your financial need. You can start by filling out the FAFSA, or Free Application for Federal Student Aid.

Myth #2: Colleges have an income cutoff for awarding aid.

There is no income limit when it comes to giving need aid. Eligibility is determined by the family’s ability to pay compared to the cost of the college. At expensive schools, families with quite high incomes can qualify for financial aid, especially when they have more than one child in college at the same time. In other words: always fill out the FAFSA and always keep in touch with your school’s financial aid department, as they can and will help you develop a strategy for paying for college and may in fact award you financial aid—even if you think your parents earn too much money to qualify.

Myth #3: My chance of being admitted is much greater if I don’t apply for aid.

First of all, 75% of all students attend a public university where it doesn’t matter to the admission office if you apply for aid or not. Even among private colleges where there is a limited aid budget, the vast majority of applicants are admitted regardless of how much money they need. Having said that, there are some private colleges that, at the tail end of the admission process, will only be able to admit “full pays” since their aid budget has been expended. From that point on, the school will fill the remainder of the class with students who do not require financial assistance. However, from the family’s point of view, there is no effective strategy to deal with the very small chance that your student will be subject to this policy. Since it is impossible to predict for any given college if the “full pay only policy” will be necessary, when it will happen, or if your student will be included, the best advice remains: if you need aid, apply for it.

 

Saving for College