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If this is BYU, then for the rest of your life your resume will proclaim you a mormon. Other schools have similar reputations.
On the other hand, an old and distinguished catholic school may not carry that stigma. You really need to look at your school's reflection on you from the eyes of an outsider.
Other than that, who cares. It's your business.
With my parents, it was an unspoken and unresolved issue for a long time. Eventually they stepped over the line with my children and I had to put a foot down. But it would have been better if it could have remained obvious but unacknowledged.
Essentially they read a "children's story" from their church to my 5yr old about salvation. Her little gears started cranking and she realized that soon she would be dead and in hell alone or she could convert and be with grandma+grandpa. But mom and dad wouldn't be there for her any more - they would be alone in hell. Real idiots write those stories who don't ever think about families with mixed religions.
"I'm afraid that telling the truth about who I am might place a huge distance between me and the ones I love."
Perhaps so, but I assure you it will not place a huge distance between you and those who love you.
You can be honest without 'trumpeting' your beliefs or being obnoxious. And contrary to others here, I think it's very important for atheists to make themselves known to others. Doing so is the only way for others to know we exist in numbers larger than they imagined and to dispel stereotypes that we are blood-drinking Satan worshipers.
I recommend you don't bring it up unless it is within the context of a conversation you're having. Say you're asked to say grace at dinner, or to pray with a friend. You can start by saying you'd prefer not to. If they question this, tell them after much thought you no longer believe in a god. If they become upset, apologize for upsetting them but tell them that's just the way you feel and you wanted to be honest. Tell them you'd like to continue your friendship with them and you hope they feel the same. Explain that not believing in a god does not change your personality or your ethics or morals.
Some will accept you as you are, some won't. You will probably lose some 'friends' and familial relationships, but you will not lose anyone who truly loves you for you.
As for the university, I can't fathom why a self-acknowledged atheist would choose to go to a religious university that requires faith as a prerequisite to attending, but you're there now. If you can't easily transfer, keep your atheism quiet until the diploma is firmly in your hand.
Forget Cary's grab-bag of rhetorical questions.
How much longer do you need to finish college? One semester, two years, or what? Could you realistically transfer to a non-religious college without losing much time, or the financial support of your parents?
If you don't have very long before you finish school, why not just continue as you are and finish? Is it painful to hide your true beliefs? How much of a charade do you have to engage in?
You already made the mistake of pledging a faith you didn't already have. I'm not sure you need to make matters worse by proclaiming your atheism, though. My advice would be to put your head down, study hard, ace your classes and get that diploma. Then that's one major concern you can set aside.
As for your friends and parents, it's simple: If they will reject you due to your atheism, they are lousy friends and horrible parents. You are 20....realize that most people retain relatively few of their college buddies throughout life anyway. People's interests and lifestyles shift and change and evolve (oops -- there's that word) and so too must their close friendships.
Your parents are the ones with the problem, and not you, if their relationship with you is damaged just because you don't have the same God-belief they do. It's pretty sad, really, that religion drives people to become so intolerant of others.
Always remember that your beliefs about the universe and the afterlife are your private thoughts and nobody else has a right to make you discuss them, or tell you that you're wrong or bad for what you think. You're an adult now and you don't have to answer to anybody for what you've decided makes sense to you.
At the risk of getting people mad again, this seems like another situation similar to Cary's questioning the LW who dressed in ways that people perceive as lesbian and then was frustrated that her boss thought she was a lesbian. I do not understand why today's LW chose to go to a religious school when he did not believe the religion that the school asked people to believe in. There are thousands of schools in this country with non-religious ones often having the best reputation. Why not go to one of those? It makes me wonder if the LW is actually more ambivalent about his own beliefs and less the perceptions of others.
Now, the issue with the parents is different. Parent-child relationships are the exceedingly powerful and important but not chosen. Believers and non-believers have a natural struggle because the believer fears not seeing their loved one in the afterlife. I don't think there is a good answer here. My general advice would be to just not force the conversation much, show love through deeds, and everyone will either be judged someday or not.
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To your family, friends, etc, (except those who you really feel like coming out to) I would say just keep your views to yourself. I am a very liberal person living in a very very conservative area. If I even use the phrase "this has been around since the dinosaurs" I'm met with a cool silence, because, hey, we all know the world is really only 7,000 years old. So if I were to even mention health care for all or express dismay with the mess in Iraq, I would lose friends, clients, my business... They are nice people, just don't think the way I do and unfortunately aren't openminded enough to accept viewpoints different than their own.
As for lying on your application, that is an ethical issue that I think you should take a long hard look at.