<p>My husband and I are in this situation; we spent years in grad school and had our children in our mid- to late 30s.</p>
<p>I don’t recall the FAFSA asking about retirement savings at all. Presumably therefore you could “shelter” savings by putting them in a 401K or 403B instead of keeping them in an all-purpose account. On the other hand, then they wouldn’t be available for college expenses.</p>
<p>In our case, our two-income academic family is not eligible for need-based aid and my son was not an outstanding enough student to get a merit scholarship at a really top-notch college or university, so if we had wanted merit aid, he would have had to compromise on the quality of the institution he would attend. We have saved diligently on an automatic-deduction plan for our two children since they were born, but we have still not accumulated enough to pay for an Ivy League or similar education without compromising our retirement savings. The solution for us is for our son to attend our excellent state flagship; our savings will easily cover the in-state tuition. Another option would be loans, but we are profoundly debt-averse and also unconvinced of the superiority of the private options in my son’s case. </p>
<p>Many of our friends are similarly situated, and they are almost all choosing the same route.</p>