7 Financial Aid Misconceptions (and Truths)

Falsehoods:

  • The best way to find money for college is to search for little-known scholarships.
  • You can’t qualify for financial aid if you own your own home or have savings in the bank.
  • The price of tuition is relatively the same for every college.
  • Every student pays about the same price at a given college.
  • A student should not consider a school with a high “sticker price”.
  • The financial aid is the same for a student whether it is a community college or a very expensive private college.
  • You should always wait to apply for aid until after your child has been accepted to a college.
  • Always pick the institution that offers the most aid.

Financial Aid Truths:

Scholarship funds represent only a small piece of all financial aid, less than 5%.  Students are required to tell the college about this money.  Most times, they simply lower their grant money offered to the student.  Don’t expect a thank you note either.

The biggest share of aid comes from federal and state governments and the colleges themselves.

Most financial aid recipients own their own home and have savings in the bank.

Tuition is like buying an airline ticket, the price paid for the same college varies greatly.

Never rule out a “good fit” college based on cost, while some students may pay the full fare, others pay far less.

According to the College Board, only about ten percent of students are enrolled in colleges with tuitions of more than $35,000.  Most students attend institutions where tuition is less than $12,000 per year.

Always apply for financial aid before the deadline.  Be careful, the deadline can actually be before the application is due.

Always remember that the real measure of the financial aid offer is not the total dollar amount but how much you (parent) end up paying and how much debt the student takes on.

One of the most important components of the college process is developing a solid financial aid strategy.  No two students should follow the same strategy.

 

Source – Paying For College Without Going Broke by Kalman A. Chany with Geoff Martz

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