It’s nerve-racking, definitely, to apply for financial aid opportunities, but you can’t procrastinate. No matter what you have heard about financial aid, there is funding accessible to every student in every income bracket. It may take a little bit of searching to find the right match for you. Below are some common misconceptions that students may have about financial aid.

“Low-income families are the only ones that qualify for financial aid.”

Most federal grants go to students with exceptional need or extenuating circumstances, but there are many low-interest loans that benefit middle-class families. Based on your FAFSA, the U.S. Department of Education will determine your Expected Family Contribution (EFC). This is the amount your family can afford to pay upfront for any school. If your EFC is high, you may not qualify for aid at a less-expensive state school, but you could receive aid if you attend an expensive private school.

Schools and private organizations also award merit-based scholarships to students with outstanding grades or test scores, or significant community achievements. Your financial situation does not play a role in determining whether you will receive a merit-based scholarship.

“I will only receive financial aid if I have exceptional grades.”

While merit-based scholarships usually take a student’s grades into account, federal financial aid is based on financial need. The U.S. Department of Education uses the FAFSA to determine how much you and your family can pay for college based on your financial situation. The lower your EFC, the more aid you will receive. Most aid is given to students in the form of low-interest loans, but there are also federal grants for students with exceptional need. Work-study positions are available to students whose financial background falls somewhere in the middle. Some students receive all three types of aid. While your loans will need to be repaid with interest, money received in the form of grants or work-study does not need to be repaid.

“I should wait until I’m accepted to a school to apply for financial aid.”

Absolutely not! The FAFSA is available on October 1 each year to students planning to attend school the following fall. While most schools won’t send out acceptance offers until March or April, their FAFSA deadline may be as early as February. Some grants are first-come, first-served, so the earlier you finish your FAFSA, the better. The FAFSA will give you the option to send your completed application to up to 10 schools. After your FAFSA is processed, you will receive a Data Release Number which you can then distribute to any other schools to which you have applied.

Besides the FAFSA, some schools may require you to fill out the CSS Profile. It is another financial aid application that gives colleges more detailed information about your financial situation. Unlike the FAFSA, the CSS Profile is not free. The institutions that require it will not make you a financial aid offer until both the FAFSA and the CSS Profile are complete. It also becomes available on October 1 each year.

Finally, if you want to apply for private grants and scholarships, you can search and apply beginning your freshman year of high school, and sometimes even earlier. This gives you a head start when it comes to figuring out your college finances. Not only should you apply for scholarships that will provide money for your freshman year, but you can continue to apply for more and different scholarships throughout college.

“The FAFSA takes too long to fill out and isn’t worth it.”

Filing the FAFSA has become easier over the years. The U.S. Department of Education estimates that it will take new applicants only 30 minutes to complete the application. With $122 billion dollars in federal financial aid distributed to 12.7 million students last year, your time really is money. Most students fill out the FAFSA online, where the program walks you through the entire application process, but there are paper copies of the application available.

“My parents and I have to file our taxes before we can fill out my FAFSA.”

Actually, the FAFSA requires you to use tax information from two years prior to the upcoming school year, or, the most recent taxes you’ve filed. This means that if you were to fill out the FAFSA this October for the 2020–2021 school year, you would submit information from your and your parents’ 2018 tax returns.

“I only have to fill out the FAFSA before my freshman year.”

Alas, this is not the case. To qualify for federal financial aid, you need to fill out the FAFSA every year that you are in college. The good news is that you can keep the same FSA ID so that the FAFSA automatically transfers some of your stored information from one year to the next. Obviously your and your parent’s income taxes will change, as might the amount of money you have in bank accounts and investments, but nonfinancial information will already be filled out for you after your first year. Just select “FAFSA Renewal” when you’re given the option. Remember, the FAFSA becomes available October 1 every year, so be sure to fill it out and submit it as early as possible to maximize your financial aid award.

“My tuition will stay the same every year I’m in school.”

This is a common misconception, but your tuition is likely to increase with inflation every year you are in school. There are a few schools that have recently adopted tuition guarantee plans that promise students their tuition will remain the same for the duration of their college career. However, room and board at these schools isn’t included in the guarantee, and both of these costs are likely to increase.

“I don’t have to think about my loans until I graduate from college.”

This is not a good idea. Many federal loans are eligible for deferments and grace periods, meaning that you won’t have to begin repayment during college or for a six- to nine-month period following graduation, but this isn’t the case for Direct Plus Loans taken out by parents to fund a child’s education. While the government will pay the interest on some loans while you are in school, you’ll become liable for that interest if your enrollment falls below half-time.

To make matters more interesting, private loans may not be eligible for grace periods at all, so you may have to begin repayment while you’re still in school. Staying in contact with your loan servicer and lender from the beginning will help you keep track of what needs to be paid when, so you can avoid any late payments and the subsequent drop in your credit score.

“I will have to pay back my students loans in full.”

Yes, in most cases you will have to completely repay your student loans and pay back any accrued interest on top of the amount you borrowed. However, this isn’t true in every case. Some loans are eligible for federal loan forgiveness or repayment programs.

• If you have a medical degree, the Department of Health and Human Services has three programs that can help pay back the loans associated specifically with your medical degree.
• If you volunteered with AmeriCorps or work in the public sector, you could be eligible for a Segal AmeriCorps Education Award, which provides money to be put toward loan repayment, or the Public Service Loan Forgiveness Program, which essentially cancels any balance left on your loan after 10 years of payments.
• Teachers are often eligible for loan forgiveness or loan cancellation in return for a service commitment.

Page last updated: 05/2019