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Our vision of college no longer matches the reality for most people. Consider that:

Only one in four students attends a residential college -- the kind with dorms and fraternities. The rest attend commuter schools, community colleges and trade schools.

Forty-five percent of students attending four-year schools work 20 or more hours a week, while 60% of community-college students work at least that much.

Twenty-three percent of college students have dependent children.

Given how different most people's college experiences are from the myth of toga parties and ivy-covered buildings, maybe it's not surprising that so many other college fables have taken hold.

Over the summer I dealt with three common misunderstandings in "3 college myths that will cost you":

  • "Saving for college will hurt my child's chances of getting financial aid." (Reality: If you can save, you should.)
  • "College costs too much." (Reality: Not attending could cost you a lot more.)
  • "A public school will be cheaper than a private college." (Reality: Budget cuts and crowded campuses mean it could take you years longer to complete a degree at a public school.)

Liz Weston

Liz Weston

Now I'll tackle three more higher-education myths that can set you back financially. Starting with:

1. "There's no point in filling out a financial-aid application, because we aren't needy enough."

"Most families underestimate their eligibility for need-based aid and overestimate their eligibility for merit-based aid," said Mark Kantrowitz, a financial-aid expert and the author of "Secrets to Winning a Scholarship."

In other words, your kid probably won't attract full-ride scholarships even if she is a whiz at basketball or math. But your family may qualify for need-based aid, even if your income approaches six figures, if the school is expensive or you have more than one child in college at a time.

"The financial-aid formulas are complicated enough that you can't tell whether you are eligible for financial aid without applying," said Kantrowitz, the publisher of Fastweb and FinAid.

"Middle- and upper-income families might qualify for financial aid if they have multiple children in college at the same time or their children are enrolled at higher-cost colleges," he said.

If you're sure you don't qualify for need-based aid, though, you still should fill out the Free Application for Federal Student Aid, or FAFSA, if you want access to federal student loans. Federal education loans are typically much better than private student loans, since the federal version offers fixed rates, flexible repayment options and the possibility of forgiveness.

"The unsubsidized Stafford loan and the Parent PLUS loan do not depend on financial need, so you don't have to be poor to qualify. Even Bill Gates could qualify for these loans," Kantrowitz said. "The federal government requires families to file the FAFSA to get these loans, however, in order to ensure that they get all the grants and other gift aid for which they are eligible."

Filling out the FAFSA takes about an hour, Kantrowitz said.

2. "Borrowing for an education is a bad idea."

Overdosing on student loans and other debt is clearly detrimental to your financial health. But excessive suspicion of debt could keep some people from getting degrees that could justify the costs of borrowing.

A Public Agenda study of high school graduates who didn't go on to graduate from college found they were far more likely than college graduates to:

  • Be unfamiliar with the financial aid process. Only three in 10 high school graduates recognized the term "FAFSA," the gateway application for financial aid, compared with seven in 10 college graduates.
  • Be unconvinced that borrowing for a college degree can make sense. Fifty-four percent of college graduates strongly agreed that "even if someone has to take out a loan to go to college, it is worth it in the long run," compared with 37% of those who didn't graduate from college.
  • Believe that "there are many ways to succeed in today's work world without a college education" (57% of nongraduates versus 40% of college grads).

These optimists may be counting on a world that no longer exists. The jobs that once provided stable middle-class incomes for many people without college degrees -- such as union manufacturing jobs -- are fast disappearing. Currently, 59% of jobs require some college education, according to the Georgetown University Center on Education and the Workforce. By 2018, the proportion is projected to reach 63%.

Obviously, a college degree doesn't guarantee a great income or lifetime employment. But even in today's lousy economy, college graduates have half the unemployment rate of high school grads, and on average will earn far more over their lifetimes.

So getting a degree is important. It's just not necessarily cheap or easy. Loans have long since replaced grants as the predominant form of financial aid. You can try to go it alone by working and paying out of pocket for your education, but another Public Agenda study found that students doing so were more likely to drop out rather than finish their educations.

So taking on a moderate amount of student loan debt can be a sensible investment. To ensure you don't overdose, you should:

  • Fill out the FAFSA so you can qualify for federal loans.
  • Don't borrow more for your education than you expect to make your first year out of school.
  • Consider limiting yourself to federal loans and avoiding private student loans, which have variable rates and lack consumer protections.
  • Make sure you get your degree -- a college education is economically useless without that sheepskin.

3. "A college degree always pays off."

Some college graduates end up earning less than their peers who went to work right after high school. Nineteen percent of male college graduates and 14% of female college graduates aged 25 to 34 actually earned less than their counterparts who had only high school degrees, according researchers for the Center for American Progress.

And recent college grads with massive student loans -- but no jobs -- are a standard part of the "Occupy" protests around the country.

Yet I still hear from college students, and their parents, who are signing up for expensive educations with uncertain economic prospects. Many aren't even sure what the kid will study but are prepared to hock their homes, empty their retirement accounts and/or sign up for a lifetime of debt to pay for it.

You can't predict when a recession will upend career plans. But you can improve the chances a degree will pay off if you:

  • Pick a major wisely. Love philosophy? Awesome. Go ahead and get a minor in it, but major in something with a better yield. A degree in an in-demand field typically is a far better investment than one in a stagnant or low-paying area. Another Georgetown survey, "What's It Worth?," shows the dramatically different payoffs of various majors, with engineering at the top (median income, $75,000) and social work and education at the bottom (median income, $42,000).

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  • Limit what you spend on education. Another way to put this: Kids, don't borrow six figures just to get a bachelor's degree. Parents, don't put your retirement at risk to pay for your child's education. If you can't pay for school using savings, current earnings and federal student loans, you may not be able to afford the education you're buying and need to look for more-affordable options.

Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.