4 Strategies for Securing More Financial Aid

Save in your name, not your student's

The federal financial aid formula assesses student savings at 20%, as opposed to the 5.6% assessed on parental assets (after an allowance). If you've already saved in your child's name -- say, in a Uniform Gifts to Minors Account (UGMA) -- you can cash out and transfer the money to a custodial 529 savings account, which is assessed at the parent's rate. (The sale may trigger capital-gains tax, and the gains will be included as income in the following year's Free Application for Federal Student Aid.) Or have your student spend his or her own money for necessary expenses, such as a new laptop or a car.

Pay off debt before applying for aid

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

The FAFSA requires that you report income from the previous year but report assets as of the day you submit your application. Pay any major expenses first so that you can report fewer assets.

Double-check your numbers

You're encouraged to file your FAFSA soon after January 1 (the earliest you can apply), the better to get in on scarce grant money. But you may not have the tax documents to report your exact income. Go ahead and estimate, but be careful not to overstate the amount. That's an easy mistake to make if you're relying on the last pay stub of the previous year because you may not account for all your reductions to taxable income. Income matters far more than assets in the financial aid formula. Don't trip yourself up by looking richer than you are.

Spell out special circumstances

If you recently lost your job, incurred heavy medical expenses or suffered another major financial setback, let the college know -- even if you’ve already gotten the financial aid award. "Some families don’t realize there’s a little wiggle or negotiation room," says Cara Stevens, a high school counselor and part-time college planning consultant in Marion, Ohio.