The five biggests myths about funding your college education

Few people spend much time researching financial aid. Instead, they rely on the knowledge of their fellow students or their parents. In other words, what they know is little better than hearsay. Not surprisingly, much of what is considered "common knowledge" is quite inaccurate. This can cost you big.

College financial aid is a complex and frequently changing system. Even professional counselors have trouble keeping up! Certain mispreceptions seem to never go away. They have a life of their own and misguide students year after year. Here are the five that I run across most often:

Myth #1: Only the poor can receive a significant amount of financial aid

Government aid, such as the Pell Grant, is geared toward low-income students, but it is by no means the only source of aid. Many scholarships and loan programs do not consider income levels at all. What many people do not realize, however, is that the government's definition of needy students is more lenient than they may imagine. For example, applicants need not be below the poverty level to qualify. If fact, in some cases your family may even have an above average income and still receive aid, especially if you are planning to attend a costly school.

Federal grants can be quite substantial. For the 2013-14 school term, the maximum Pell Grant Award is $5645.

It is easy to find out how much government aid you can expect. Even if you are only in middle school, you can click the "Thinking About College" link at to use the FAFSA4caster tool and get a quick estimate.

Myth #2: State Schools are the cheapest option

It is generally true that tuition at public universities is much less than at private colleges, but this is not the whole story. Private schools often have more scholarship opportunities that can offset the difference in tuition prices.

Private schools know that most families cannot afford to attend without generous assistance, so they have built large endowments to fund scholarships and other aid programs. For example, Harvard's annual tuition is nearly $40,000, but so much aid is available that the school can boast that almost 90% of students pay the same or less than they would at a state school

Myth #3: Only academic superstars or atheletes win scholarships

Obviously, being a "straight A" student or star quarterback are great advantages to winning aid. Most schools, however, seek a diverse student body. Therefore, many different factors--gender, ethnicity, regional diversity, unique talents--factor into the awarding of scholarships. Take a personal inventory. Consider what makes you unique and look for opportunities that match your characteristics.

Myth #4: A paid scholarship search service can find the best awards for me

Many counselors will tell you to never pay for a scholarship search. I think this is usually good advice. There is little that the paid service will do for you that you cannot do yourself. Worse, some services are complete scams that will waste your time and money.  This is not to say that you should not seek professional help. By all means, talk to your high school counselor and meet with the financial aid department of every school that accepts your application, but most of your scholarship search can be conducted on your own. The free online databases are a good place to start. See my recommendations here: Scholarship search sites

Myth #5: Only High School seniors are eligible for scholarships

This myth is a costly one. Many students stop looking for awards after their first semester of college begins and miss out on some of the best opportunities for aid. You should think of this time as a second chance to apply for scholarships, especially if your high school grades were not the best. Your first year in college gives you a chance to distinguish yourself academically and show that you are worthy of aid. Consult with your school financial aid office to find what opportunities may be available.

Go to page 13: Adult Scholarships