Top 10 FAFSA Myths Debunked

Loans, Student Loans
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Students who want to be eligible to receive financial aid from the government or their college have to fill out the Free Application for Federal Student Aid. But many students fail to complete the complicated form, often because they are perplexed by it or don’t think they’ll get aid. Learn why some of the most common FAFSA myths shouldn’t hold you back from applying for financial aid for college.

Myth 1: My parents make too much money, so I won’t qualify for aid.

Fact: You won’t know until you try.

“Filing the FAFSA form is free, and you will never know your eligibility for aid, merit- or need-based, unless you apply,” says Nancy Hoover, director of financial aid at Denison University in Granville, Ohio, and member of the executive board for the National Direct Student Loan Coalition.

It’s also important to know that the formula isn’t cut-and-dried. According to Steven A. Boorstein, a certified financial planner at RockCrest Financial in Franklinville, New Jersey, “The mathematical formula behind the calculation is based on parent and student income, age of the oldest parent, size of the family, ages of children in the family and several other factors,” he says.

The FAFSA also isn’t just about financial need. If you don’t complete the form, you also may not be able to qualify for merit scholarships for grades, SAT scores or athletics. “Some schools require the FAFSA form for their institutional scholarships, regardless of the income of the family; not filing eliminates an opportunity for gift aid,” Hoover says.

Myth 2: College is too expensive for me.

Fact: Financial aid through FAFSA can make it attainable.

“Colleges and universities across the country have never offered so much of their resources for financial aid,” says Tom Delahunt, vice president for admission and student financial planning at Drake University in Des Moines, Iowa. “There are schools that on average are offering students grants and scholarships that reduce the cost of attendance by over 40%. The only catch is you have to apply for it!” Yes, that means completing the FAFSA.

Myth 3: The FAFSA is only for grant money and scholarships.

Fact: It’s also a requirement for loans, and it awards work-study programs.

Rosemary Ferrucci, associate dean of financial aid at New York Institute of Technology in New York City, says there’s a lot more to the FAFSA than just free grant money. “Financial aid actually includes utilizing federal money to pay part of an expense now (tuition) but not paying any interest while in school or even not having to pay that full amount of money back until after graduation,” she says, as is the case with Subsidized Stafford Loans and Perkins Loans. She adds that others are “awarded federal college work study — working at school, around your schedule and getting a paycheck for it.” If you don’t fill out the FAFSA, you aren’t eligible for these types of aid, either.

Myth 4: I only have to fill out the FAFSA once.

Fact: You have to fill it out every year.

Why? “The school wants to know if you get a big raise, and conversely, you want them to know if you lose a job or take a big pay cut, so they’re watching your income and assets year over year to make sure what they’re giving you is still appropriate,” explains Charlie Donaldson, president of College Bound Coaching LLC in Newark, Delaware.

Don’t think of it as a pain, but something that can help you. “If the parents’ or student’s income goes down, they would qualify for more financial aid in the future years,” Donaldson says. “It’s to the student’s benefit to make sure they update their info every year.”

Myth 5: It doesn’t matter when I turn in FAFSA as long as I make the deadline.

Fact: You’re more likely to get aid if you submit it right away.

Donaldson says filling out the FAFSA is a bit like Black Friday; the first people to show up have the best chance of scoring the deals, and those who are late may miss out. “When you’re applying for financial aid, you want to be first in line,” he says. “The sooner you can get it in, the better.” Schools may run out of funding and not have any aid money left for stragglers.

Myth 6: I can fill out the FAFSA anywhere, and I may have to pay for it.

Fact: You should use the official site and never pay.

There is only one official FAFSA form online, and you should be completing it at fafsa.ed.gov, warns Kiara Smith, founder and consultant at Year O.N.E. College Consulting in Texas. “FAFSA stands for the FREE application for federal student aid,” she says. “You should never pay money to file this application.” Delahunt adds that many states also host free FAFSA completion sessions to guide you through the form.

Stay away from websites that aren’t official, especially if they request a payment. Not only are you unnecessarily spending money, but you could also risk your information being stolen if you use a site that isn’t reputable.

Myth 7: I won’t qualify for aid because I don’t have good grades.

Fact: It’s not about grades.

The U.S. Department of Education has discovered that this is a common myth that prevents some students from filling out the FAFSA. According to Christopher Hanlon, director of financial aid at Albright College in Reading, Pennsylvania, “While it is the case that you may not qualify for an institutionally based scholarship if you did not perform well in high school, if you have financial need, you will qualify for need-based aid from federal sources, state sources or college sources.”

Sarah Trausch, assistant director of financial aid at Creighton University in Omaha, Nebraska, adds, “Need-based federal financial aid isn’t based on grades — it’s based on a family’s ability to pay.” But you do have to make decent grades to keep your aid. “Once a student is in college and receiving federal aid, he/she must maintain the minimum satisfactory academic progress guidelines set by his/her college or university to continue receiving federal financial aid,” Trausch says.

Myth 8: The estimated family contribution number is the exact amount I have to pay.

Fact: It’s just an estimate; you may owe less.

“The biggest misconception we see is about estimated family contribution,” says Joseph Trentacoste, assistant vice president of student services at Mercy College in Dobbs Ferry, New York. Although the EFC is based on dollar figures, it is not the exact amount you will have to pay for college, and it is only used as an index to determine your eligibility for federal awards. Other factors, the largest being the cost of your school, play in to the amount and type of aid you can receive,” he explains. Additionally, each school has its own formula for determining aid, so you may owe less than the EFC calculated on the FAFSA.

Myth 9: I can’t fill out the FAFSA until my parents file their taxes.

Fact: File it with an estimate based on last year; submit a correction later.

“Since taxes are often not completed until later, students and parents can complete the FAFSA based on estimations,” says Ferrucci of New York Institute of Technology. “Then, once the actual taxes are completed and submitted, a student or parent can go back and update the figures accurately.” Don’t forget to update the information once the taxes are filed. It’s free and easy to make a correction to your FAFSA online.

Myth 10: It doesn’t make a difference whether I fill it out online or on paper.

Fact: Online is faster and more accurate.

“There is a difference,” says Trentacoste. “Paper FAFSAs can be confusing to complete and have to travel through the mail and be entered into the Department of Education computer system, which can take up to three weeks for processing.”

Completing it online is easy and walks you through the process, only asking questions relevant to your situation. This increases the chances your school will receive accurate information, he says. “Plus, since you enter your data directly into the system, it can be processed within two or three days.”

Additionally, the FAFSA now has a tool that links to your parents’ IRS tax data, which automatically fills fields with their latest information. This not only makes the process much faster, but it also greatly increases accuracy, making it more likely you will receive the aid you need.


Myth/Fact illustration via Shutterstock.