Increase college financial aid by planning now

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(MoneyWatch) Now is the time to think about some money moves you can make that can increase the amount of college financial aid your student receives. I'm not saying you can magically get loads of free money for college by using a few financial gimmicks, but you can increase the amount of federal student loans and work study aid your student qualifies for by making a few strategic financial moves.

First, if you have significant savings, schools will expect you to use a portion of that money for college expenses. The more money the government believes you can contribute to your child's college education, the less money it's willing to lend you. So, before you apply for financial aid, consider using some of your savings to pay down debt, make additional mortgage payments, contribute to your 401(k) or an IRA or buy big-ticket items such as a car or computer. This helps because when figuring out aid eligibility, the federal financial aid methodology does not take consumer debt, retirement accounts, the mortgage on your primary home or recent purchases into account.

Make these moves now to increase college financial aid
Students paying more of their college costs

Next, if your student has any money that's been saved in her own name, move it to a 529 plan, or transfer the assets to your name. The government expects students to apply over a third of their own money towards education costs. On the other hand, only 5.6 percent of a parent's savings are required to be used for college expenses. The same goes for assets in a 529 plan account. And here's another hint: If the 529 plan is in a grandparent's name, with your student listed as beneficiary, none of that money is considered when determining financial aid.

Before you fill out the FAFSA form - the Free Application for Federal Student Aid form - file your taxes so you're working with your real income and tax liability numbers. You're allowed to use estimates, but you don't want to risk submitting figures that are too high.

And finally, get that FAFSA form in the mail as soon as possible. Financial aid administrators distribute funds on a first-come, first-served basis. And when the money's gone, you're out of luck until next year.

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[LarryDannenberg]

You missed the most important way to minimize college costs. Choose the college that fits you the first time. 27% of first year students do not return. Transferring is expensive since not all your credits will transfer. Thus you pay for an added semester or year. Plus you are not working. The second most important item is to look at four year graduation rates. You go to college to get a diploma. Only 55% of students have received a diploma after six years. Bottom line find the right fit for the student and the family financially.
Larry Dannenberg
www.collegesolutions.com

[CollegeGamePlan]

These are piece-meal ideas that can certainly assist a few families with the financial aid process. However, the article only talks about one of the two formulas colleges use to determine need-based aid. Also, some data are out of date (like the 35% student asset assessment FinancialAidManager mentions in a previous comment).
Bottom line is every family has different circumstances and they should try to figure out what is affordable, based on their resources, before a student starts junior year in high school. Here's a great tool for families (free for 7 days): http://www.collegesearchgameplanmembers.com/?ap_id=toddw

[FinancialAidManager]

I'm not certain why you would advise parents to spend down assets in order to borrow more federal student loans. Why incur loans with interest rates when you already have available assets saved for college? The asset assessment rate for dependent student assets is 20 percent, not 35% as it was some time ago. Seems ironic that a conservative financial page would coach parents how to dupe the government in order to rely more on government services.

[samanthamcshine]

Saving for college is crucial and so is starting to save early. With new a new online college savings registry, called GradSave, parents can do exactly that. It allows parents, friends and families to pull to together and donate to a child's college savings, instead of toys or clothes for birthdays and holidays. You can even set it up up before you have a 529 plan and then connect the accounts when you do! www.gradsave.com