With the cost of college on the rise, misinformation about college loans is on the rise as well. Understanding the truth about college loans is becoming more important than ever. These common myths should get you thinking …

Myth #1: If a family makes too much money, there is no need to file a Free Application for Federal Student Aid (FAFSA).

Reality: The only way to qualify for a loan through the federal government is to complete the FAFSA. If your family is planning to use any federal loans, filing the FAFSA is a must.

Myth #2: Accepting a PLUS Loan is always the safest option for parents.

Reality: Before accepting the PLUS loan, there are several factors to consider.

By qualifying for a PLUS loan, a parent is eligible to receive the full cost of education for their dependent student (minus any other financial assistance received, of course). This fact alone can help alleviate an immense amount of financial stress when a child begins their postsecondary journey. However, there are several other factors to be considered.

First and foremost, there is currently a 6.31% interest rate and a 4.276% loan fee associated with the PLUS loan. Sure, this rate is fixed for the life of the loan, but parents with an excellent credit history must ask themselves if perhaps a private college loan could yield more desirable results? Parents should examine all options before making a commitment, i.e. banks, credit unions, online lenders, etc. Moreover, during the application for a PLUS loan, the government looks only for negative marks on a parents’ credit history. The feasibility that a parent can actually repay the loan is not taken into account. One should utilize online tools, like that offered by studentloans.gov, or seek help from a professional college financial planning firm, like ourselves, in order to determine what amount is safe to borrow.

Myth #3: Since some colleges, especially private institutions, traditionally favor high-income families, it is okay to indicate on the application that you will not be applying for financial aid when in fact you intend to do just the opposite upon acceptance.

Reality: It is never advisable to lie on an application!

After all, both the admissions committee and the financial aid department at the school will play a huge part in determining your child’s future. Making either party angry is a horrible idea. It is perfectly okay to wait until after an acceptance letter has been received, however, to complete your FAFSA. This is assuming that you are paying close attention to the filing deadline. Remember the following two points: (1) don’t lie about your intentions and (2) don’t miss the FAFSA filing deadline. Managing cut-off dates for the FAFSA and different college applications can become extremely taxing on both parents and students. Once again, we recommend seeking professional college planning advice to ease the pain of this process.

Remember … the number one thing to keep in mind is that there is no “cookie cutter” approach that works for everyone. Families who are starting the college planning process should talk to a professional in order to avoid destroying the family finances.