Think You Shouldn’t File a FAFSA? 8 Financial Aid Myths Keeping Money From Your Pocket
by Suzanne Shafer, Parent Editor
Starting tomorrow (October 1), students can file their FAFSA form and be first in line for financial aid.
Misunderstandings about financial aid can lead to missed opportunities. According to a study last year by NerdScholar, high school graduates in the U.S. left more than $2.9 billion in free federal grant money unused over the last academic year.
How is that even possible? According to the study, their only mistake was not completing the FAFSA.
Here are 8 myths that might be preventing you from claiming money:
Myth 1: It’s pointless to apply for financial aid if your family makes too much money.
Reality: Annual income is important in the aid calculations, but so is the school’s price tag. Other factors, such as how many children are attending college, are taken into consideration. Additionally, colleges use the form to determine who gets their need-based and non-need-based merit aid.
Myth 2: Financial aid offers are final with no room for negotiation.
Reality: Policies on negotiating aid awards vary wildly between schools. You can often use other aid awards to ask for more money. Colleges will often compete with other institutions where aid money is concerned. Many colleges are open to negotiation to fill their freshman class.
Myth 3: Saving too much money disqualifies families from financial aid.
Reality: Less than 4% of families who apply for financial aid are penalized for their savings. The aid formulas build in asset protection, ignoring retirement savings and home ownership when looking at total assets.
Myth 4: Only students with the best grades qualify for financial aid.
Reality: Most financial aid is need-based. A smaller portion is merit based.
Myth 5: Student loans aren’t worth it.
Reality: Most students take out some federal student loans. But, be cautious in how much you borrow, especially when it comes to private student loans. Always choose the federal loans first. The interest rates and payment options are lower after graduation.
Myth 6: Only rich kids attend the elite and expensive institutions.
Reality:The higher the tuition, the easier it is to show financial need. Very few families end up paying a college’s sticker price. Parental income of students in private colleges is lower than that of students at large state universities.
Myth 7: College tuition is topping $30,000 a year these days.
Reality: In-state tuition and fees at public 4-year colleges averages $4751 a year. In addition, 47% of full-time undergrads attend a four-year college that charge less than $9000 a year. And college bargains are everywhere; you just need to know where to look.
Myth 8: It’s rare to receive a financial aid award.
Reality: Colleges use financial aid to woo students: Close to 80% of undergrads receive some form of financial aid.
In conclusion, before you dismiss the FAFSA, consider that it’s free and you have nothing to lose! But possibly much to gain.