Far too often people pass around “information” about financial aid that is simply inaccurate. What was true thirty years ago has often changed. It is also difficult to have general conversations about financial aid and scholarships because every student’s individual circumstances will be so different. What holds true for one student may be irrelevant or misleading for another. Here are some of the most common misconceptions, along with accurate information you can use for financial aid planning.
1. Financial aid is just for low income families
Maybe you’ve heard about a relative or friend who didn’t qualify for financial aid and you assume your circumstances are similar. This can be a mistake. It is hard to judge the financial circumstances of another family because people make very different choices about money. Students attending more expensive private colleges are also sometimes surprised to find out they are eligible for more aid than they expected. For example, Princeton’s financial aid office provides a useful chart showing the average financial aid offers families can expect to get at varying income levels. Families with an income of $140,000 to $160,000 receive on average over $40,000 a year in grants.
The University of Chicago may have a sticker price of over $80,000 but families with incomes under $60,000 have zero cost and families with incomes under $125,000 do not pay tuition.
2. Just stop claiming your teen on your taxes and they can be independent for financial aid purposes
There are very specific requirements to be able to claim independent student status. It is impossible for most students under the age of 24 unless they have very specific circumstances. These rules have changed a lot over the last thirty years so make sure you have up to date information before you make any plans.
3. There are millions of unclaimed scholarship dollars – apply for everything and you will get money
Unclaimed scholarship money is a claim that is mainly stated by companies trying to sell scholarship service information. Many of these scholarship services are scams. The reality is that private scholarships (from organizations, businesses, and foundations) are less than 5% of the money available for college. Most students are funded parents, by federal and state governments and by the colleges and universities themselves.
It isn’t a good use of time to apply for every scholarship under the sun. Senior year is already busy without adding the burden to apply to hundreds of randomly chosen scholarships. If your student is interested in private scholarships they need to look carefully at eligibility requirements and target their efforts to scholarships that offer the best odds of success. Every scholarship application is different so students who are serious about private scholarships need to be prepared to write a lot of essays. Scholarships through local organizations and parent employers are often the choices with the best odds.
4. Homeschoolers must earn a GED in order to get financial aid
State and federal financial aid does not require homeschoolers to pass the GED in order to receive financial aid. The reality is that most homeschoolers do not take the GED. Graduating from a homeschool is earning a high school degree. While individuals working at colleges may occasionally misinterpret financial aid requirements, the law is clear that homeschoolers do not need to have the GED in order to receive financial aid. The vast majority of homeschoolers graduate with an independent homeschool diploma not a GED.
5. The FAFSA is complicated and time consuming
In reality most families find the FAFSA fairly simple to complete. It can take more time for families who have particularly complex financial situations, but the majority will be able to complete the FAFSA in less than half an hour. Families should also know they do not need to wait to file taxes to file the FAFSA.
6. Just move to a state and live there for a year and you’ll get in-state tuition
There can be a huge cost difference between tuition at public universities for students who live in-state and students coming from out of state. While years ago it was common for students to just move to the other state for a year before college and work to establish residency it is not so simple in many states now. Colleges and the state legislatures that are making allocations for higher education want tax dollars to support state residents first. Colleges have established very complex policies and procedures for determining in-state student status. Students really need to look at each college and each state individually before they set out on a plan to try to establish residency. There are out of state tuition bargains but students need to build this planning into the early stages of their college admissions application planning.