Myth #1: "My kids won't qualify for financial aid unless our household income falls below a specific cutoff amount."

That's not necessarily true. A number of factors influence your status in qualifying for aid. Schools take into consideration:

1. The cost of the school
2. Whether you're a one-parent or two-parent household
3. Whether both parents are working and earning income
4. The number of children and other dependents in the family (so if you are supporting your aging parents, that will be factored in)
5. Number of family members currently paying tuition (so if you're thinking of going to school yourself, you might actually enhance your child's chances of getting aid!)
6. High medical expenses in the family (again, if you are supporting aging parents and they require a great deal of medical care, that will be part of the picture)
7. Total value of the family's assets

As you can see, there's much more to be considered than simply household income. In fact, since the amount of aid is in part determined by the cost of the school, parents with an income of under $40,000 could find that it costs them less to send a child to a top private university than to a state university!

Also, virtually every family can receive a low-rate Stafford loan and a PLUS loan, which covers the total college cost. (Apply at your local bank or credit union.) They don't lessen the load, but they do spread it out. Since July 1, 2006, interest rates have been fixed at 6.8% for Stafford loans and 8.5% for PLUS loans. (For more information on student loans, we recommend www.finaid.org/loans and www.estudentloan.com.)

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