The information in this article is provided courtesy of Chris Doran in UVA’s Student Financial Services Office.
Myth: My parents don’t make much money, so I can’t possibly afford to go to XYZ University.
Fact: This is simply not true. Many wonderful schools (including UVA) have committed to meeting 100% of a student’s demonstrated need, so if they can earn admission, they should be able to use available financial aid to cover their costs. This is where loans and budgeting, along with making good consumer financial decisions about things like credit cards and housing choices, come into play. Do your research, ask questions, and keep good records. Your first choice of where you want to go may be much more affordable than you think! And once you get there, take advantage of campus resources, such as peer financial counseling, to help keep you on the right path and feeling financially confident.
Myth: My parents make too much money for me to qualify for financial aid.
Fact: Financial aid offices regularly recommend that every student fill out the FAFSA their first year. Especially with expected changes coming to FAFSA eligibility calculations in the next few years, students may have more eligibility than they might assume! Even if it’s just the difference between qualifying for the subsidized or unsubsidized federal student loan, saved interest matters.
Myth: Student loans are not financial aid.
Fact: Loans bridge the gap between grants or scholarships and what you would otherwise have to pay out of pocket. Low-interest student loans, both subsidized and unsubsidized, are the best available options for borrowing money to help pay for school. Borrow the full subsidized amount before borrowing any of the unsubsidized!
Myth: You need to carry a monthly balance on your credit card to build a good credit history.
Fact: Throw this notion away! When it comes to credit cards, the smartest plan is to pay the balance in full each month after your billing cycle ends, if you can. It’s a free loan if you do that! The most important element of keeping a good credit rating is to make your payment on time, even if you are only able to pay part of your balance. Late payments are the real enemy to credit health.
Myth: My financial aid will pay for my apartment, regardless of how much it costs.
Fact: This untrue, and it’s a crushing lesson for many students every year. Students sign a 12-month lease at an expensive hotel and assume their financial aid will cover it—but it won’t. The housing budget in the financial aid model is for 9 months, not 12, and it is based on on-campus housing costs, which are almost always lower than what most apartment complexes will be. Be smart when you sign your lease!
Myth: Budgets are just an organized way to make yourself miserable about money.
Fact: On the contrary, developing and sticking to a budget, regardless of how much you have, is the key to financial liberation and enjoyment! If you plan in your budget for your night out with friends, you are far more likely to enjoy it because it’s all part of the plan. Real stress about finances comes from unplanned and unrestrained spending that ultimately makes you anxious and may even threaten your ability to stay in school.