College has become so expensive that parents with incomes as high as $150,000 might qualify for some "need-based" aid, if their student is going to an expensive private university. With two children in expensive schools at the same time, families might qualify for financial with income as high as $200,000.
Public universities are much less expensive than elite private universities so children from middle- and upper-middle-income families might not qualify for financial aid. Even if they do qualify, financial aid from a public university might be in the form of loans, which have to be repaid, or work-study programs.
Private universities often offer aid via grants and scholarships, which are superior forms of financial aid. Thus, planning for financial aid may have the greatest payoff for families with moderate income who expect their children to attend expensive private colleges. For such families, holding down the student’s assets and income will generate the most financial aid.
Other strategies include prepaying mortgages and making large purchases (autos, computers) to reduce cash that must be disclosed on a financial aid application.
