This article is from the Financial Aid, Scholarships, and Fellowships FAQ, by Mark Kantrowitz with numerous contributions by others.
1. Won't the government take away our home if we apply for aid for our
No. Absolutely not. This myth seems to be pervasive, and causes
many families to avoid applying for financial aid. The government
does NOT take away your home when you apply for financial aid.
2. All financial aid packages include term-time work, and working
while trying to study is bad.
First of all, numerous studies have shown that a small amount of
term-time employement (10 hours per week) improves academic
performance. Secondly, you can always refuse the work-study aid
and pay for the expenses covered by that aid through other means,
such as loans and summer employment.