20 ways to get federal money for college

13. Keep up the course load
Maximizing aid eligibility means not only scoring an award, but maintaining it. Federal programs such as the Pell grant are tied to your child's student status, meaning that if he or she drops a class, it could wind up costing more than a blemished grade point average. To keep the money coming in year after year, read the fine print and make sure that both you and your child understand the course-load and grade requirements.

14. Work it
In work-study programs, student earnings are exempt from the watchful eye of financial-aid officers. By landing a work-study job, your child will not only be able to earn money throughout the school year, he'll also be gaining professional training, networking contacts and something to put on the resume besides "member of break-dancing club."

15. Reduce capital gains
Capital gains from stocks, bonds and mutual funds count as income and could stand between your child and a fat aid check. If you're thinking about selling your securities and redeploying that cash into your retirement fund, a new home or paying off debt, Kantrowitz recommends doing so no later than your child's sophomore year in high school. "Sell two years prior to going to college so that it occurs not in the base year, but the year before," he says. "Two years before won't count against you."

16. Test yourself
Parents whose combined gross income is at or near the $50,000 level, listen up: You could get free dough by proving it. Designed to benefit middle-income households and those with special circumstances, the simplified needs test ignores assets, as well as savings, when determining financial-aid eligibility. To qualify for the test, combined wages reported on the W-2 must be less than $50,000, and every family member must be eligible to file a 1040A or 1040EZ form with the IRS. To get your hands on a copy of the test, consult your accountant or financial-aid adviser.

17. Perk up
The higher the family income, the lower the financial-aid eligibility, but nobody ever said anything about perks. Instead of a raise or bonus this year, try negotiating more flexible hours, subsidized meals, extra vacation time, gym memberships, loan forgiveness, tuition reimbursement or a better insurance package. Such gifts that don't show up as income on your W-2 could wind up saving both you and your boss cash in the end.

18. Report the support
One of the few items parents can deduct is child support, that is, if they remember to do so. "People tend to not read the (FAFSA) work sheets and omit things like child support that reduces their income," says Kantrowitz. "That can impact your financial aid." Child-support payments made for any student outside of the household are considered asset deductions and can be subtracted directly from a parent's total income. Likewise, any support received on behalf of the child must also be reported and counted as additional income.

19. Use the grandparents
Mom and dad are fair game for federal scrutiny, but grandma and gramps are a different story. 529 plans held by grandparents are not included when assessing a family's expected college contribution. Encourage the grandparents to forgo graduation, birthday or holiday presents to your child, and ask them to instead open and contribute to a college savings plan instead.

20. Be honest
The fastest way to lose out on an aid package is by being deceitful. "The formula is so heavily based on income, it's really hard to think about ways to get around that," says Thomas. "You can really get in trouble if you try to manipulate the formula by hiding things." According to, schools are required to verify one out of every three FAFSA applications and many choose to verify all. Hiding assets or falsifying information can result in financial penalties, loss of aid and, in some cases, jail time.


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