By Sandra M. Moore, MA, IECA (NY)

Imagine this scenario: you’re leisurely surfing Facebook when you notice that one of your friends has posted a frantic alert: “Beware of the ABC virus that’s chewing up mass quantities of emails from coast to coast. Do NOT open messages that include in the subject line any combination of the letters a, b, or c.”

Sound familiar? Not surprisingly, when this kind of thing happens, many folks panic. They madly race to their inboxes to see if the last message from Great Aunt Martha was really a virus-laden ABC email in disguise. Certainly, several of us have been duped in this way. But others—people in the know—typically jump on Snopes.com (a hoax debunking website) to see if such a bug truly exists or whether the circulating “alert” is simply another Internet falsehood that when shared a gazillion times took on a life of its own as a so-called urban legend.

Similarly, the families we work with can get caught up in the maze of misinformation and innuendo surrounding the college search and admission and financial aid application processes. Gossip gets spread in school parking lots and grocery store aisles every day! Someone always seems ready and able to point our families in the wrong direction, either spouting half-truths or totally bogus “facts.”

That’s where we step in. As independent educational consultants (IECs), we strive to belong to the in-the-know group. Part of our job as IECs is to stay on top of hot topics and ongoing developments in the wide world of college admission and financial aid. But doing so takes a lot of time and effort. And many of us, admittedly, are less well-informed when it comes to the whole affordability aspect of what we do.

Myth or Fact?

Fortunately, the College Committee of IECA and its affordability subcommittee are working hard to provide members with resources and training that will help all of us stay ahead of the game. In the meantime, here are just a few, favorite financial-aid-related myths debunked.

Myth: Our family will never qualify for need-based aid, so why even bother?

Fact: You don’t know exactly what you will or won’t actually qualify for unless you apply! Moreover, to get a good sense of how much particular institutions will cost before their children fall in love with them, it’s important for all families to estimate their expected family contribution (EFC). To do this, they can use a free online EFC calculator, such as the one provided by the College Board. True, an EFC may very well indicate low or no need, and as a result, a financial aid office might deem a student ineligible for a federal grant, such as Pell or SEOG. Still, the family must file the Free Application for Federal Student Aid (FAFSA) if the student wants to be considered for institutional aid. Many private colleges and universities also require the CSS/Financial Aid PROFILE to make that determination. At the very least, filing a FAFSA gives students the option of taking out a William D. Ford Federal Direct Loan (Direct Loan)—regardless of need. Loans may be subsidized or unsubsidized—subsidized Direct Loans are need-based and are offered only to students who qualify for them.

Myth: I’m not going to worry about applying for aid because my daughter will get an athletic scholarship.

Fact: Only 2% of high school athletes play sports at the college level. And if your child hasn’t been recruited by the end of the junior year, chances are she won’t be in the pool for receiving an athletic scholarship from a Division 1 or Division 2 school. If you’re not already familiar with ScholarshipStats.com, it’s a rich compendium of everything you might ever want to know about college athletics and scholarships. Although getting really good grades has been shown not only to significantly increase an athlete’s chances of being admitted to particular schools but also the chances of winning athletic scholarships, it’s a good idea for families to understand how the system works and to cover all their bases by also applying to schools that offer other forms of assistance.

Myth: My son plans to apply for “outside” scholarships because millions go unclaimed every year.

Fact: Most merit aid is distributed by colleges and universities themselves. And more often than not, to be considered for those scholarships requires no extra work on the part of the student. Unfortunately, many families erroneously believe that there’s a treasure trove of scholarships “out there” just waiting to be had for the asking. What they don’t realize is that most of the awards publicized through online subscription databases, such as FastWeb.com or MeritAid.com, are small (e.g., $100–$500) and often require an essay in addition to a separate application for each. Because students from all over the world vie for those modest awards, clients might have better luck checking out local scholarship sources, including various fraternal organizations, employers, and places of worship. But time and energy is best spent on discovering those schools that are most likely to provide generous need-based aid or merit money while making sure that students’ applications are as strong as possible so that they have a crack at both!

Myth: There’s no reason to save for college because if we do, we’ll get less aid.

Fact: Students and their parents are primarily responsible for meeting college costs. That could mean that the less a family saves, the more they may have to borrow, especially if the student applies to schools with less-than-generous aid budgets. Sure, need-based aid decisions do consider family assets, such as money put away through state-sponsored 529 and other educational savings plans, but parent assets are assessed at only about 5.6% of their value. The financial aid formulas for both FAFSA and PROFILE assess income at higher rates than assets and are income-driven, not asset-driven. Remember, too, that the formulas weigh such other factors as the number of students in college at the same time and the age of the older parent. FAFSA’s asset protection allowance, for example, can significantly reduce the percentage of a family’s savings that is actually assessed as a contribution toward educational expenses, especially in the case of near-retirement parents.

Myth: Only top students receive merit scholarships.

Fact: Many institutions practice “tuition discounting,” whereby they slash their sticker prices by thousands of dollars without students having to prove their worth in a specific way. Often colleges do this as a matter of course for B+ or A- students who’ve been judged to have no financial need but nevertheless are solid candidates with a good deal of potential. Schools typically call these tuition discounts merit scholarships, and they help lure kids to their campuses who might otherwise opt for more-well-known institutions. Indeed, if in searching for best-fit schools, families are open to places with a regional rather than national reputation, great bargains can be had.

The Bottom Line

No matter our clients’ financial situations, we as IECS provide an invaluable service by helping them avoid a lot of the stress and confusion that comes with not knowing. By encouraging families to conduct an affordability analysis early in the college search process and continually educating them on how the college financial aid process works—including what’s true and what’s not—we can help them make admission application and enrollment decisions with their eyes wide open.

Sandra M. Moore, Next Step College Consulting, can be reached at [email protected].