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You can find the EFC formula at

401k contributions are added to taxable income and taxes paid are subtracted. So contributing to a 401k doesn't lower your income, but it does lower your taxes, giving a larger "available income" and higher EFC. If income is assessed at 47%, then 47% of your tax savings goes to a higher EFC. You still come out ahead. The other benefit is that the funds in the 401k are invisible in future years. Assets outside the 401k are assessed at 5.6% so if you have removed those assets from FAFSA calculations for 10 years, you reduce EFC over 10 years by 56% of your contribution.
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