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I've accumulated a decent sum of money over the years to put towards my two daughters college education. I reviewing the FAFSA form for financial aid, it appears the people who burn up all their assests get more aid than us prudent folk.

With all due respect if you have accumulated money towards college doesn't that mean you require less aid then someone who hasn't been able to? But yes, I get your point that many of the people who don't have money saved for college are in that position because of a lack of planning but keep in mind there are some people who just don't have enough money and need that aid.

That being said...each dollar you have in your name reduces the aid eligibility by ~5.65 cents. So while you will receive less aid then say someone who hasn't saved any money the difference in aid is minimal compared to the saved cash difference. I ran a rough calculation: with $100k income and $100k saved towards kids education I'd be expected to pay $18k for college. If I then spent $50k on home improvements I'd be expected to pay about $15K. If I spent all $100k saved I'd still be expected to cover $14.6K. Do the calculation yourself at

That would lead me to believe that a person who saved well is much better off than a person who didn't save and is relying on aid. So if I'm understanding this correctly I'd say it's a bad idea to bankrupt yourself to get a little extra aid and then what, take a loan to cover college costs you could have paid from your saving beforehand, with interest?

However, if you really want to shield finances keep in mind that retirement investments and home equity are not included in calculations so you could put an addition on your house and get more aid. And then borrow off that equity to pay for college I guess.
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