How to Maximize College Financial Aid Eligibility

It is a common misconception that students from high-income families are not eligible for financial aid. In fact, anyone can be eligible for financial aid if the estimated cost of college is higher than their expected family contribution (EFC). The EFC calculation takes into account family income, family assets, family size, and the number of children in college. There are a variety of techniques that can be used to reduce EFC, and therefore boost eligibility for financial aid.

1. Hold assets in parent’s names. The EFC formula factors in the assets and income of the parents and the student. Students are expected to use up to 20% of their assets to pay for college, while their parents are only expected to use up to 5.6% of their assets. Therefore, to minimize EFC, assets should be held under the parent’s names.

2. Reduce assets by paying down debt or maximizing retirement contributions. Most liquid assets, aside from retirement accounts, are factored into the EFC calculation. You can reduce your includable assets by paying down debt or maximizing contributions to retirement accounts before filing the FAFSA.

3. Defer income. Up to 50% of a student’s income and 47% of parent’s incomes are expected to be used for college. One method of reducing reportable income is deferring it when possible. The FAFSA uses the tax return from two years prior to determine income, so any income reduction strategies must be implemented two years before the student starts attending college.

4. Apply early. Aid is provided on a first-come, first-served basis by some schools. Therefore, the FAFSA should be completed as early as possible. The FAFSA can be submitted from October 1st in the year prior to attendance through June 30th of the year of attendance.


Even if you do not qualify for grants, it may still be worthwhile to submit the FAFSA. Some schools require a FAFSA to be completed for merit-based aid and all schools require it to apply for student loans.

If you have children attending college this fall, consider filing the FAFSA. If you need any assistance filling out the paperwork or if you would like to discuss strategies for maximizing financial aid eligibility, please contact Heller Wealth Advisors to speak with one of our financial professionals.

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