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You really don’t get it, do you? EFC is NOT a guarantee of grant aid-- it is a standard by which eligibility for federal benefits is determined. What is going to happen with most of those families is that they are going to see bigger GAPS in their aid packages. With the exception of a handful of elite colleges, every other financial aid awarding college is going to look at home equity as part of the calculation. </p>
<p>Sometimes I think that the people who so confidently talk about moving assets around have never actually seen a typical financial aid award package from a mid-range university. 90% of parents who play that game are just going to see a financial aid package with a bigger gap and more loans. </p>
<p>Anyone who has $200K lying around that they can afford to reallocate doesn’t need the $10K grant they are aiming for. They can just withdraw that amount from their interest-bearing accounts each year – and 4 years down the line they’ll have maybe $190K instead of $200K. Yes, they should pay off consumer debt; yes they should fund their retirement accounts – but I really get ticked off by rich people who whine about needing financial aid while they are trying to figure out where to hide their money. Need based aid is supposed to be for people who DO NOT HAVE extra money lying around.</p>
<p>If a family has too much money to qualify for financial aid and is worried about college costs, they should encourage their kids to look for colleges that will award them merit aid. My d. had merit offers of $8-$10K from respectable colleges – that is as much money as the family would get from shuffling assets around.</p>