11 Myths and Realities of Scholarships

Myth 1: I'm not a great student or an athlete, so I won't get a scholarship Reality: You may stink at sports and have a mediocre GPA, but believe it or not, you may qualify for multiple scholarship opportunities. Awards can be based on extracurricular activities, ethnic heritage or even how well you can create a Zombie Apocalypse survival story! RELATED: 100 weird scholarship ideas Myth 2: Scholarships are only awarded to low-income families Reality: According to Sallie Mae's How America Pays for College 2014, 38 percent of students from households with incomes over $100,000 received scholarships. RELATED: How a financial planner can help you find scholarships Myth 3: Applying for scholarships is a lot of work ï ¿ ½ it's just not worth my time! Reality: While your first scholarship essay will take some time, you can reuse it for subsequent applications by making a few tweaks in order to meet specific requirements. And don't overlook small awards. If you're awarded a $5,000 scholarship, that's $5,000 you won't have to borrow for school ï ¿ ½ and pay back with interest! RELATED: Learn about using automatic scholarships to help pay for college Myth 4: I missed "scholarship season", so I'm out of luck Reality: Colleges may have certain deadlines for the scholarships they give out, but there are plenty of other types of organizations that give out scholarships all year long. RELATED: 10 things you need to know about getting scholarships Myth 5: If you're a top student, you'll automatically get scholarships Reality: There are plenty of students who are just as talented as you who want scholarships. In fact, U.S. News and World Report rankings include data from over 21,000 public high schools. That means there are 21,000 students who ranked #1 in their class, without even including students from private schools. The competition for scholarships is real ï ¿ ½ if you want an award, you're going to have to work for it. RELATED: Surprising facts about scholarships Myth 6: The FASFA determines how much I'll have to pay for school out of pocket Reality: Colleges use data from your FASFA to calculate your Expected Family Contribution (EFC). Your EFC is the amount the school believes you are able to pay out of pocket, and it's used to determine the amount of federal need-based financial aid you qualify for. But you may still be eligible for other types of scholarships that can help bring down costs. RELATED: How much financial aid will you get? Use this tool to get an idea. Myth 7: Only colleges award scholarships Reality: There are many types of corporations, local organizations and even high school districts that award scholarships. Start by checking with your parents' place of employment and your school guidance counselor to see what might be available in your area, and then explore online opportunities. RELATED: 5 secrets to winning a college scholarship Myth 8: Getting scholarships will hurt financial aid eligibility Reality: The government does take awards into consideration, but any affect on your aid package will be minimal. A scholarship may reduce the amount of federal student loans you qualify for, which is actually a good thing ï ¿ ½ since you have to pay back a loan, but not a scholarship. RELATED: How 7 different assets affect financial aid eligibility Myth 9: My financial advisor knows nothing about scholarships Reality: This might be true, but many advisors are eager to help families find ways to bring down the costs of college, including finding scholarships. In fact, according to an article from >Investment News, today's advisors are playing a key role in their clients' college planning decisions. RELATED: You're saying my financial advisor can help me plan for college? Myth 10: If I get a scholarship, I'll lose all of the money I saved in my 529 plan Reality: You'll never lose all of the money you saved in a 529 plan. If you get a scholarship, you can take a non-qualified withdrawal from your plan up to the amount of the award without getting hit with the normal 10% penalty. You will, however, have to pay federal income tax on the earnings withdrawn. To avoid paying any taxes, you can always save the money in the plan for another qualifying family member who will be attending college. RELATED: 8 common 529 plan mistakes to avoid Myth 11: I should pay a scholarship agency to help with my search. Reality: Unfortunately, there are many scholarship scams out there. Agencies that charge a fee for services likely fall into this category. And remember, scholarships and grants can never be guaranteed. If you need help finding scholarships, consult your financial advisor or a reputable site such as Fastweb.com or Scholarships.com. RELATED: 5 ways to cut college costs Myth 1: I'm not a great student or an athlete, so I won't get a scholarship Reality: You may stink at sports and have a mediocre GPA, but believe it or not, you may qualify for multiple scholarship opportunities. Awards can be based on extracurricular activities, ethnic heritage or even how well you can create a Zombie Apocalypse survival story! RELATED: 100 weird scholarship ideas Myth 2: Scholarships are only awarded to low-income families Reality: According to Sallie Mae's How America Pays for College 2014, 38 percent of students from households with incomes over $100,000 received scholarships. RELATED: How a financial planner can help you find scholarships Myth 3: Applying for scholarships is a lot of work ï ¿ ½ it's just not worth my time! Reality: While your first scholarship essay will take some time, you can reuse it for subsequent applications by making a few tweaks in order to meet specific requirements. And don't overlook small awards. If you're awarded a $5,000 scholarship, that's $5,000 you won't have to borrow for school ï ¿ ½ and pay back with interest! RELATED: Learn about using automatic scholarships to help pay for college Myth 4: I missed "scholarship season", so I'm out of luck Reality: Colleges may have certain deadlines for the scholarships they give out, but there are plenty of other types of organizations that give out scholarships all year long. RELATED: 10 things you need to know about getting scholarships Myth 5: If you're a top student, you'll automatically get scholarships Reality: There are plenty of students who are just as talented as you who want scholarships. In fact, U.S. News and World Report rankings include data from over 21,000 public high schools. That means there are 21,000 students who ranked #1 in their class, without even including students from private schools. The competition for scholarships is real ï ¿ ½ if you want an award, you're going to have to work for it. RELATED: Surprising facts about scholarships Myth 6: The FASFA determines how much I'll have to pay for school out of pocket Reality: Colleges use data from your FASFA to calculate your Expected Family Contribution (EFC). Your EFC is the amount the school believes you are able to pay out of pocket, and it's used to determine the amount of federal need-based financial aid you qualify for. But you may still be eligible for other types of scholarships that can help bring down costs. RELATED: How much financial aid will you get? Use this tool to get an idea. Myth 7: Only colleges award scholarships Reality: There are many types of corporations, local organizations and even high school districts that award scholarships. Start by checking with your parents' place of employment and your school guidance counselor to see what might be available in your area, and then explore online opportunities. RELATED: 5 secrets to winning a college scholarship Myth 8: Getting scholarships will hurt financial aid eligibility Reality: The government does take awards into consideration, but any affect on your aid package will be minimal. A scholarship may reduce the amount of federal student loans you qualify for, which is actually a good thing ï ¿ ½ since you have to pay back a loan, but not a scholarship. RELATED: How 7 different assets affect financial aid eligibility Myth 9: My financial advisor knows nothing about scholarships Reality: This might be true, but many advisors are eager to help families find ways to bring down the costs of college, including finding scholarships. In fact, according to an article from >Investment News, today's advisors are playing a key role in their clients' college planning decisions. RELATED: You're saying my financial advisor can help me plan for college? Myth 10: If I get a scholarship, I'll lose all of the money I saved in my 529 plan Reality: You'll never lose all of the money you saved in a 529 plan. If you get a scholarship, you can take a non-qualified withdrawal from your plan up to the amount of the award without getting hit with the normal 10% penalty. You will, however, have to pay federal income tax on the earnings withdrawn. To avoid paying any taxes, you can always save the money in the plan for another qualifying family member who will be attending college. RELATED: 8 common 529 plan mistakes to avoid Myth 11: I should pay a scholarship agency to help with my search. Reality: Unfortunately, there are many scholarship scams out there. Agencies that charge a fee for services likely fall into this category. And remember, scholarships and grants can never be guaranteed. If you need help finding scholarships, consult your financial advisor or a reputable site such as Fastweb.com or Scholarships.com. RELATED: 5 ways to cut college costs