(Reuters) - Saving for college, applying for admittance and getting financial aid can all be complicated processes, so it's not surprising that many myths have sprung up about paying for education.

The following five myths, however, can wind up costing you dearly:

1. Saving for college hurts financial aid.

Saving in a child's name — such as in a custodial account — definitely has a big negative impact on potential financial aid, since financial aid formulas expect 35 percent of the student's assets to be spent each year on college.

Money in 529 college savings plans, on the other hand, typically has little impact, since it's counted as a parental asset and less than 6 percent of the balance will be counted against financial aid.

Income counts far more heavily than assets in determining financial aid, in any case. The more income you make, the more colleges will assume you've saved for college, whether you actually have or not.

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