When it comes to financial aid, believing in a few myths can cost you a lot. Every year, students lose out on thousands of dollars that they could have gotten by way of scholarships, grants, and federal student loans simply because of a few prevailing misconceptions.
Take a look at some of the common financial aid myths that may be costing you money and the truth behind them.
Myth 1 – Only students from low-income families qualify for financial aid
This is one of the most prevalent misconceptions when it comes to financial aid and is singly responsible for costing students the most money.
Financial aid is available in several different forms]—most famously from scholarships. Not all of these take family income into consideration. You may not be eligible for a need-based grant if your family income is above the specified level but you can apply for merit-based scholarships, which are awarded irrespective of income. You can also apply for loans.
Different colleges award scholarships based on different criteria. The main purpose behind these scholarships is to woo the most talented students to their institutions in order to boost their prestige and rankings. If you meet a particular college’s scholarship criteria, you can avail of it regardless of your family income.
Other than scholarships and other financial packages that different schools offer, you can also pursue federal loans and private loans no matter what your family income. You will have to pay it back after you graduate but that’s a whole other matter.
Myth 2 – Filling out the FAFSA is a waste of time as you get only a fraction of the money you really need
Finance experts recommend that ALL students must complete and submit the Free Application for Federal Student Aid or FAFSA irrespective of financial background. Even if you do not get the entire amount that you need for your tuition, completing this federal financial aid form offers several benefits.
For one thing, it automatically establishes a line of credit with the federal government, so you can avail of other resources to borrow low-interest, unsecured money towards college costs that are not covered by financial aid. If the financial aid you receive from college is not enough, it is a relief to know that you can turn to this reliable source of money.
Secondly, filling the FAFSA allows you to find other resources, such as low-interest student loans, campus work-study jobs, and grants that you do not have to pay back.
Lastly, submitting the FAFSA acts as a buffer against unexpected circumstances. If disaster strikes in the future, whether it is a divorce or loss of employment, colleges can help families pay for and continue with their education provided that they have your FAFSA on file.
Filling the FAFSA does take time but it is totally worth it for all the benefits that you get.
Myth 3 – You need to fill the FAFSA only once
Many families submit the FAFSA only once—when applying for the first year of college. This is a mistake. The FAFSA must be completed and submitted every year. This is because the federal aid that a student qualifies for keeps changing every year depending on the changes in the family’s financial situation. A student may be eligible for additional federal aid in their subsequent years in college but they will need to fill and submit a fresh FAFSA to avail of it.
Myth 4 – Financial aid is only awarded to students with good grades
It’s a myth born out of the presumption that schools and financial institutions only back students who are academically brilliant. This is far from true. Most educational and financial institutions aim to develop well-rounded students who will contribute to the community in different ways. Towards this end they award scholarships for a variety of reasons from participation in sports, arts and theater to community service and participation in environmental conservation projects.
If you have less-than-stellar grades, don’t let that stop you from pursuing financial aid if you need it. Yes, there are merit-based financial aid programs, for which maintaining good grades is a prerequisite, but there are also other programs that do not consider test scores and grades. Instead of giving up completely, change your focus and explore other avenues.
Myth 5 – Attending college is out of the question if the financial aid received does not cover the cost of tuition
As we said earlier, financial aid is available in several different forms. If you do not qualify for one type, you should consider another. Not every student can get their entire cost of education covered through free money. If you do not qualify for scholarships and grants, you can still look at work-study programs and federal student loans to help finance your education.
Getting a college education will make it easier for you to get a higher-paying job after you graduate, which will in turn make it easier to repay those student loans that you took when you started college.
Myth 6: Financial aid is not negotiable—you have to take what you get
This is completely untrue. Most people simple assume that when they receive a financial package from college it is a final decision and is non-negotiable. The fact is financial aid is completely negotiable. If your financial circumstances have changed and you only need a fraction of the loan you initially applied for, all you need to do is write a letter explaining the situation.
On the other hand, you can also ask if you need more money than is offered to you. If you need more money, you must be prepared to make a strong case for yourself and be able to produce documentation that clearly demonstrates your need. If you can submit supporting evidence, most colleges will oblige if they have the extra funds.
If you do not need to take a loan at all because you’ve received substantial scholarships and other forms of financial aid, you can even turn down the full loan amount. You are under no obligation to take a loan just because you applied for it. When you take a loan, you will have to pay it back with interest so only take what you need and if you need it. Believing that a financial aid package is non-negotiable can end up costing you a lot of money.
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