<p>It will increase your AGI (that you must report on FAFSA) by $25,000 so yes it will increase the EFC. (Income has a bigger affect on the EFC than assets). You can request a special circumstances adjustment from the financial aid officer at the school. But it is at the financial aid officer’s discretion whether they make an adjustment or not. If it were me I would hesitate to do the conversion now if financial aid is an important issue.</p>