Legal strategies to lower our SAI with two high schoolers (senior & junior) heading to college?

Thanks for this! We hadn't even thought about accelerating planned purchases. We've been putting off replacing our 15-year-old HVAC system, but maybe we should do that ASAP? And I didn't realize retirement contributions were so important for this.

I must strongly caution against this approach. Transferring assets specifically to manipulate financial aid eligibility can be considered fraud by the Department of Education. The FAFSA requires you to report all assets, and there are significant penalties for misrepresentation. Furthermore, such transfers could trigger gift tax issues or other legal complications.

I feel this so much. We're in that exact same boat - the dreaded "too rich for aid, too poor for tuition" category. Have you looked into merit scholarships though? That's been our saving grace. My son wasn't eligible for need-based aid but got $22,000/year in merit scholarships at his second-choice school, which made it actually affordable compared to his first choice that only offered $5,000.

This is incredibly helpful! We have a 529 in our son's name that we started when he was born - should we change that ownership? And what about our emergency fund? We've always kept about $30k in savings for emergencies - will that hurt us?

Great questions! For the 529, if it's currently in your son's name (with him as both owner and beneficiary), you might want to consider changing ownership to yourself or your spouse. Student-owned assets are assessed at 20% in the FAFSA formula, whereas parent-owned assets (including parent-owned 529 plans) are assessed at a maximum rate of 5.64%. Regarding your emergency fund, yes, it will be counted as a parent asset on the FAFSA, but there is an Asset Protection Allowance that shields some of your assets based on the age of the oldest parent. Additionally, remember that parent assets are assessed at a maximum of 5.64%, so $30,000 in savings would impact your SAI by at most about $1,692. Don't compromise your family's financial security by depleting your emergency fund just to marginally improve aid eligibility.

That's a great point. Do you just call the financial aid office after you get the initial offer? I'm worried they'll just give us a form response.

Ya u gotta be PERSISTENT!! Keep calling and ask to speak to a financial aid counselor not just whoever answers the phone. They can do whats called "professional judgment" if u have special circumstances they didnt see on your fafsa.

We've discussed that option but my son is really set on the "traditional college experience" - living in dorms, etc. Maybe we need to have a more serious conversation about the financial realities. Did your kids push back on the community college idea at first?

Oh yes, there was definitely resistance initially! What worked for us was visiting several four-year schools first, getting excited about them, and then sitting down with an actual budget spreadsheet showing the total cost difference ($120k vs $50k per child for a bachelor's). We also arranged for them to talk with some recent CC transfers who are now at their target universities. Those students shared how they had smaller classes with professors (not TAs) at the CC level, and still got plenty of the college experience during their junior/senior years. We compromised by agreeing they could live in an apartment near the CC rather than at home - still cheaper than dorms but gives them some independence.

this!! my kid got a full ride scholarship to alabama with just decent grades + test scores and we make too much for any aid

Small businesses with fewer than 100 full-time equivalent employees that are family-owned and controlled (more than 50% family ownership) are not reported as assets on the FAFSA. This is correct as of the 2024-2025 FAFSA. This is specifically mentioned in the FAFSA instructions and has been a longstanding exclusion in the formula.

That's really encouraging! Did you use any specific resources to identify schools with good merit aid? Or just research each school individually?

We used the College Board's BigFuture website to search for colleges with merit aid. Also, look at each school's Common Data Set (just Google the school name + "common data set") - Section H shows what percentage of students get merit aid and the average amount. Another great resource was "Merit Aid at a Glance" from Road2College.com. I also recommend checking out schools where your son's stats are well above their averages - they often offer the best merit packages to attract strong students.

This is incredibly helpful - I hadn't thought about accelerating property tax payments! We actually have both an FSA and HSA through my employer that we haven't been maxing out. The HSA especially sounds like a win-win since it helps with both taxes and FAFSA calculations. Do you know if there are any deadlines for making those HSA contributions to count for the tax year that FAFSA will look at? And thank you for mentioning state aid programs - I honestly hadn't even researched what our state offers beyond the basic state university grants.