15 Financial Aid Myths
There are a lot of misconceptions and myths surrounding financial aid and the FAFSA and we understand why. It certainly can be confusing! Unfortunately, certain impressions can affect your ability to maximize the aid you’re eligible for. That’s why clearing up the rumors is so important! Here are just a few of the top financial aid myths you may have heard and why you shouldn’t believe them.
Myth #1: Wealthy and middle-class students shouldn’t bother filling out the FAFSA.
Everyone should fill out the FAFSA. Often, families aren’t the best judges of their own eligibility and even families with higher-than-average incomes qualify for large amounts of financial aid, especially if they have several children attending college at the same time. Also keep in mind that if your family’s financial situation changes, it may be more difficult to get aid if you didn’t initially submit the FAFSA.
Myth #2: It doesn’t matter when I submit the FAFSA as long as I meet the deadline.
File the FAFSA as early as you can! Some states hand out money on a first-come, first-served basis. That means filing late means you could get less aid than someone who applied as soon as the application opened.
Myth #3: My family didn’t qualify for aid last year, so we shouldn’t bother filling out the FAFSA again.
Small changes from year to year can drastically change the amount of aid you qualify for. Just because a family only qualified for loans last year, doesn’t mean they won’t be awarded a different package this year. This is especially true if a family has more than one child in college. In short: Everyone should fill out the FAFSA every single year, no exceptions.
Myth #4: Scholarships are only for talented athletes or students with a 4.0 GPA.
There are scholarships out there for anyone – you don’t necessarily need to be a math genius or a football star to qualify. Some organizations award scholarships based on ethnicity, special talents, leadership abilities, volunteer work, or even physical characteristics like height! Many don’t even take your grades into account! If you’ve filled out your Cappex.com profile, we’ll be able to match you with scholarships to help you pay for school.
Myth #5: The FAFSA is too long and complicated to fill out.
The FAFSA does seem intimidating at first, but that doesn’t mean you shouldn’t bother completing it. The first time you apply will take you the longest, but in subsequent years some of the fields that won’t change (like your name, for example) will autopopulate so you’ll just need to update the form. Remember, even if it takes some time and effort, it’s still worth doing.
Here’s a quick guide to the FAFSA to get you started.
Myth #6: I can’t fill out FAFSA because my parents haven’t filed their taxes yet.
For the 2016 year, you can complete the FAFSA without your parents’ 2015 tax information. All you need to do is fill in estimates for income and tax information (you can use the previous year’s tax returns for reference here). You’ll be able to correct your application after your parents have filed their taxes.
However, the FAFSA is changing and the application will now open in October rather than January. For example, if you’re applying for aid for the 2017-2018 school year or later, you’ll be able to apply starting in October with your family’s 2015 tax returns.
(See this article for more information on how the FAFSA will change in 2016.)
Myth #7: FAFSA only determines a student’s eligibility for need-based grants.
Filing the FAFSA can qualify you for much more than need-based grants, which is another reason why everyone should fill out the application. In addition to need-based grants, you may qualify for work-study programs or loans.
Myth #8: Scholarships are only available to poor students.
Many scholarship applications don’t take family income into account. Some will consider financial need, but others only ask about other qualifying factors. These could include academic history, volunteer work, ethnic background, intended major, community involvement or a range of other qualifications.
Myth #9: Scholarships are only available to minority students.
While it’s true some scholarships are for people with a certain ethnic background, that isn’t true of many financial awards. Most applications probably won’t ask about your heritage if it’s not a scholarship specifically for minority students.
According to Mark Kantrowitz, Publisher and Vice President of Strategy at Cappex.com, caucasian students are 40\\\% more likely to win a private scholarship than minority students.
Myth #10: The FAFSA is only loans, so why bother?
FAFSA packages differ and include work-study programs and grants as well as student loans.
Myth #11: We saved too much and won’t qualify for aid.
Saving money is always a good thing. While it’s true having more assets may decrease your eligibility for need-based aid, that doesn’t mean you won’t meet the aid requirements. The FAFSA won’t even take into account all assets (retirement plans for instance). Again, all families should fill out the FAFSA every year, because you never know what you’ll qualify for.
Myth #12: The expected family contribution is the amount you pay, regardless of where you go to school.
The expected family contribution isn’t how much you’ll pay; it’s actually the number used by your college to figure out how much federal aid you’re eligible for.
We’ve put together a student loan glossary and a financial aid cheat sheet to help you understand all the terms you’ve been hearing lately.
Myth #13: You can declare yourself an independent student to qualify for more aid.
You must meet certain criteria to qualify as an independent student – it’s not just something you can choose to do in the hope of getting more aid. You can determine your dependency status for the FAFSA here.
Myth #14: Home equity hurts aid eligibility.
The net home equity on a family’s primary residence isn’t reported on the FAFSA. Net home equity on investment properties or second homes, however, is listed as an asset on the FAFSA. You can check out which assets are sheltered from the FAFSA here.
Myth #15: We make too much money to qualify for aid.
You’d be surprised how much aid you may qualify for, even if your family is upper or middle class. Fill out the FAFSA even if you think your family’s income is too high to qualify you for aid.