Beliefs have been studied across disciplines using a variety of approaches. In the human memory literature, expectations and beliefs drawn from prior knowledge are characterized and studied as schematic knowledge. In this chapter, we will discuss the role schematic knowledge plays in guiding the formation and retrieval of memories. A central focus will be placed upon understanding why retrieved memories are biased toward prior beliefs or schematic knowledge. Through a review of computational models and empirical findings, this chapter will convey that even though prior beliefs generate memory biases, these memory biases ultimately maximize the average memory accuracy – giving rise to optimal behavior. In the last section of the chapter, I will connect these modeling frameworks to more recent empirical results on the role of schematic knowledge, identifying potential future directions for updating the models and venues for conducting new experiments.