#CollegeCash on Thursday, September 15, 2011 theme was financial aid Myth vs. Realty. Chat hostess and resident financial aid expert Jodi Okun designed this week’s one hour seminar for those confused about the financial aid process and to dispel some of the myths that are out there about applying for and receiving financial aid. This workshop was originally presented in a live, one hour Twitter Chat and the content has been modified slightly for this summary.
Myth One: Should you fill out FAFSA paperwork if parents make a lot of money? Will you qualify for aid?
Realties:
· There is no income cut-off to qualify for federal student aid.
· Factors besides income-from size of family to age of older parent-are taken into account.
· Eligibility is determined by a mathematical formula not by parents’ income alone.
· Remember- fill out FAFSA & you automatically apply for funds from State.
· Not every student will get need-based grants or scholarships (gift aid).
· Every student is eligible for Federal student loan program (self-help aid).
· Every student should apply for aid!
· Don’t make assumptions about what you’ll get.
Myth Two: We are not filling out FAFSA, only students with good grades get financial aid.
Realities:
· High grade point average may help a student get into a college.
· Most federal student aid programs do not take a student’s grades into consideration.
· Students need satisfactory academic progress for federal student aid to help complete their education.
Myth Three: We are not going fill out the FAFSA, you have to be a minority to get financial aid.
Realities:
· Funds from federal student aid programs are awarded for financial need not on race.
· FAFSA doesn’t even collect this information on applicant.
Myth Four- Not going fill out the FAFSA the form is too hard to fill out.
Realties:
· The FAFSA is the only way to get federal aid www.fafsa.ed.gov.
· There are instructions for every question.
· If you need help there are many sources to guide you.
Myth Five: My family can't afford private school tuition.
Realties:
· Don't rule out college of your dreams just because of sticker price.
· If college has higher tuition students can often get more financial aid to help.
· If private school meets academic and extracurricular needs, go ahead & apply.
· Make your decision when financial aid letters arrive.
Myth Six: I'm expecting to receive a lot of scholarships, so I don't need to apply for aid.
Realties:
· You never know when there is grant or loan money to cover expenses.
· Things not included in tuition: room & board, textbooks, computers, etc.
· You can always turn money down if you find you don't need it.
· In the unlikely event that you need to switch schools you've secured aid towards new school.
Myth Seven: My parents saved money for my college education we won't qualify for aid.
Realties:
· True the more money you save for college the less you will probably get in financial aid.
· But the EFC is determined more so by income than by savings.
· Meaning that you could still qualify for aid even if you have college savings.
· It is smarter to save money & earn a return than to borrow money & pay interest.
There are several myths about getting money for college, don't believe everything you hear!
Myth Eight: We haven’t saved anything for college, community college is my only option.
Realties:
· Families who have not saved will have expected contribution quite modest.
· Parent contribution can be paid from savings income, or loans.
· The tuition bill is split in half or quarters over the course of the year.
· Tuition installment payment plans are also available.
Myth Nine: Only wealthy kids go to elite expensive schools.
Realties:
· The higher the cost of education the easier it is to demonstrate financial need.
· Studies show parental income of students in private college are on average lower than incomes of students at large state colleges.
· Apply to the schools of your choice.
· Apply for financial aid, wait to see financial aid award letter and then choose your college.
Myth Ten: Only students from really low-income families qualify for financial aid.
Realties:
· Most financial aid is reserved for needy families.
· But there are many forms of aid to help families meet expected contribution.
· For example: low-interest loans & scholarships.
· Apply for financial aid whether you think you’re qualified or not.
· You may be surprised to find out you do qualify!
Myth Eleven: The cost of a college education just isn’t worth it!
Realties:
· A four-year college grad earns almost $1 million more over his/her lifetime than a high school grad!
· Other benefit of a college education include: More job opportunities, greater knowledge and broadened perspectives
Myth Twelve: A college can cost as much as $35,000 a year.
Realties:
· True, there are some private colleges where tuition costs more than a new car.
· 78% of college students attend schools where tuition & fees are less than $8,000 per year.
· The average tuition & fees for a public for-year college/university is approximately 9,000 per year.
· Remember the Reality behind Myth Nine: higher the cost of education easier it is to demonstrate financial need.
Myth Thirteen: I am going to be the only student on financial aid.
Realties:
· At four-year colleges 60% of full-time students receive some kind of financial aid.
· At some private colleges, 75% of students receive some form of financial aid.
· Don’t worry, you’ll be in good company.
Myth Fourteen: All debt is bad. So, I shouldn’t take out student loans
Realties:
· Student loans are “good debt” because a college degree increases your earnings potential.
· Student loan repayments are manageable.
· The average beginning salary for a graduate from a large west coast public university is $38,170 annually.
· If a student borrowed a total of $15,000, payments would only be $172 per month.
· Defaulting on a student loan (or any loan) is not good. Make prompt payments & build your credit rating.
· Federally backed educational loans are a good investment & available to almost all students.
Myth15: As a star athlete, I know I can get an athletic scholarship.
Realties:
· About 1% to 2% of undergraduates receive athletic scholarships.
· Availability and award amount of an athletic scholarship varies.
· Athletic scholarships depend on athletic division the college participates in & the specific sport.
· Most student aid is awarded on the basis of financial need
For more information on collegiate athletics go to www.ncaa.org.
Some fun tweets from #CollegeCash tonight:
Next week, Jodi will have special guest, Steve Cassady
Hashtracking report http://www.hashtracking.com/fast-report/?hashtag=collegecash
#COLLEGECASHHashTracking.com Report
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Thanks to Peggy Fitzpatrick for writing this summary you can connect with her @PegFitzpatrick or check out her Twylah page at http://www.twylah.com/PegFitzpatrick
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