Financial Aid Myths and Realities

Uncover the truths behind 12 common misunderstandings about financial aid.

Grades 9-12 10 min Resource by:
Listen to this article

The college application and financial aid process can be confusing to anyone, especially first-time postsecondary students. Because of this, students may encounter misconceptions and misinformation as they navigate the process. To help clarify some of the most common misunderstandings, we’ve developed this list of myths along with the accompanying truths that will help you get a more accurate picture of this process and of what to expect.


Myth #1: You can’t afford college, or you can’t afford the college of your dreams.

Truth: When students and parents see the tuition price, the cost of living in the dorms, and the price of textbooks, they get “sticker shock.” Paying for college is the largest single investment that many families make. Over 83% of full-time, first-time undergraduate students get at least some financial aid to help make college more affordable. Students can receive a combination of grants, loans, scholarships, or work-study jobs to help reduce the cost of college.

Myth #2: My dream college is a private school, so my family can’t afford the tuition.

Truth: Don’t rule out the college of your dreams just because of the cost. If a college has higher tuition and expenses, students often get more financial aid to help cover the extra cost. For example, at Harvard University, 20% of students pay nothing to attend, and more than half receive need-based scholarships. In fact, the school has pledged that “your financial circumstances will not keep you from Harvard.”

Myth #3: You have to be very poor, very smart, or uncommonly talented to qualify for financial aid.

Truth: Financial aid comes in many forms. Grants and scholarships don’t have to be repaid; loans do have to be repaid. There is need-based aid for students who come from lower-income families and merit-based aid for students who excel in athletics, drama, debate, instrumental music, community service, and many other areas.

Myth #4: The college with the lowest price will be the most affordable.

Truth: Not necessarily! Some of the more expensive colleges have raised significant amounts of money for scholarships from their alumni and donors. As a result, they have more money to give to students in the form of scholarships, which reduces the “sticker price.” If a student qualifies for need-based aid, they may receive more financial aid at the more expensive school, thus reducing the final cost.

Myth #5: You can get more scholarships or financial aid for college by paying someone to search for you.

Truth: Beware of any group or individual that guarantees a scholarship or financial aid if you pay a fee. These groups utilize high-pressure tactics to get parents to pay for a service they don’t need. There are many very good, free scholarship and financial aid sources.

Myth #6: I’m expecting to receive a lot of scholarships, so I don’t need to apply for aid.

Truth: Apply for all types of aid: scholarships, grants, work-study opportunities, and loans. If your final tab after paying tuition, fees, books, room and board, etc., is completely covered by your scholarships, you can turn down the other aid. Also, in the unlikely event that you need to switch schools unexpectedly, you’ve already secured some aid toward your potential new school.

Myth #7: I am going to pay for college myself, so it doesn’t matter how much money my parents make.

Truth: Most need-based financial aid is based on parents’ income and assets. Most schools require students to fill out the Free Application for Federal Student Aid (FAFSA®) in order to qualify for need-based aid. That form asks for parents’ income information.

Myth #8: You can wait until you get accepted to a college before worrying about financial aid.

Truth: Most financial aid is distributed on a first-come, first-served basis. Planning should start junior year around what sources of financial aid you’ll apply for. There are some scholarships that are available to juniors, so starting early may mean more money for college.

Myth #9: I want to go to college, but my parents don’t have the money, and I can’t afford to take out loans to pay for college.

Truth: Almost all students today can get low-interest education loans to help them pay for college, and education loans typically don’t have to be paid back until a student is out of school. The average loan debt of undergraduate students today is roughly $30,000—that’s less than the cost of most new cars!

Myth #10: There is no money for college.

Truth: Total annual financial aid available to students is over $230 billion. This includes the entire spectrum of aid, such as grants, scholarships, work-study, and low-interest and government-subsidized loans. However, students must apply for the different types of financial aid, meet the requirements, and meet the timelines.

Myth #11: My parents make too much money to qualify for any aid.

Truth: This is the biggest myth of all and the most dangerous. There are no income limitations on aid. While a family with significant income may not be eligible for need-based aid, there are dozens of strategies available to lower the cost of college. Always submit the FAFSA to see what you qualify for. There may be family circumstances that increase your chances of getting some aid, including the number of family members in college, household size, age of older parent, etc.

Myth #12: The process of applying for financial aid is too complicated.

Truth: For many schools, the only step involved in applying for financial aid is to fill out the FAFSA. Completing the FAFSA is actually very easy, especially if you do it online. There are detailed instructions for every question as well as online help.