<p>I’ll never forget that sick, there-must-be-something-wrong-with-my-eyes feeling when I first saw our EFC. And it does seem perverse, like you are being punished for being such a good saver. From the colleges’ standpoint, they want to save their grant money for students who don’t have those funds available, rather than those who do (like you, unfortunately). </p>
<p>It is indeed good that you’re starting so early. You have time to do a little research and move the maximum amount of funds possible into retirement accounts and other places where colleges are less apt to look. </p>
<p>One possibility, although it may be uncomfortable, is to use a significant part of your savings in various ways that will help you, and yet make you look poorer to the colleges. For example, you could pay down your mortgage if you have one; many (most?) colleges do not look at equity as a college piggy-bank. Paying off the car (and any other non-mortage debt) will improve your current cash flow, while reducing the size of that juicy savings account. </p>
<p>Consider doing some strategic spending right before you file FAFSA. We bought D’s college laptop in January instead of June, and paid our property taxes 3 months before they were due. I’m not advocating a wild spending spree, but if you’re going to make a major purchase anyway, time it so that your balance sheet looks smaller when it counts. Do you need a new washing machine; does the house need a new roof? Neither of those items are counted against you on FAFSA, but the cash you’re saving to pay for them does. </p>
<p>When it’s time to put together the list of colleges to be applied to, concentrate on those who are known for giving generous merit scholarships. Have your kids apply to schools where their grades/scores would put them in the top 25% of applicants.</p>
<p>But unfortunately, unless all of your kids get full-rides, you’re probably going to have to reconcile yourselves to having a considerably smaller safety net. The choice you have is in determining exactly how it shrinks. You can either mail it off to colleges, or you can use it to benefit your own financial picture in ways that aren’t on FAFSA’s radar.</p>