There are many myths when it comes to the financial aspect of college. Not only are a lot of these misconceptions based on rumors and gossip, but things are also constantly changing.
Here are 5 common myths about college costs.
All College Loans are Alike
A lot of people think that taking out private and federal loans is pretty much the same thing. However, nothing could be further from the truth. Most federal loans have fixed rates, and they offer a few different ways to receive loan forgiveness. Private loans, on the other hand, tend to have variable rates and there is absolutely no chance of loan forgiveness, so you could end up seeing your interest rate skyrocket one year to the next and there will be nothing you can do about it.
Saving for College Hinders Your Chance of Getting Financial Aid
Some people think that if you have an open account where you have been saving money for college that you will not be as eligible for financial aid. This is also a huge myth. If you want to start saving for your child’s college fund, then you want to put your money into a 529 account. This money will not be taxed when you withdraw it so long as it goes toward education, and the government wants to encourage this behavior, so they don’t hold back on financial aid if they see that you are preparing yourself appropriately.
A Liberal Arts Degree is a Bad Investment
A degree in science, technology, engineering, or mathematics may be a great way to find a high-earning job, but there’s no guarantee that will necessarily happen, and there’s no guarantee that you will be able to keep that job. In fact, studies show that a lot of history and education majors tend to find jobs that earn just as much money and careers in fields like education offer more stability and better benefits. The bottom line is that you should major in whichever field holds the most interest for you and if you are passionate about a topic then there will be a job out there for you.
Private College is Too Expensive
Most middle-class families assume that they cannot afford private school because they make too much to qualify for student aid. However, these days, student aid in schools like New England College is based just as much on merit as it is on income. The elite private schools are highly competitive when it comes to claiming successful alumni. That’s why they offer just as much if not more financial support to students with high GPAs and test scores than they do for students who come from low-income families.
Transferring From Community College is Always Cost-Effective
If a student is particularly ambitious, chooses a community college with solid connections to a few 4-year universities, and takes on a full-time course schedule, then it is possible that community college will be more cost-effective. Then again, studies show that the majority of community college students don’t perform particularly well, don’t transfer within 2 years, and tend to struggle with transferring to decent 4-year universities altogether.