You are wise to be thinking of this in advance and this board is a great place to come to for advice. Wish I had started earlier. Some links relating to financial aid you might find helpful:
http://studentaid.ed.gov/students/pu...2008/ques.html
^^ step by step guide to filling out FAFSA
http://studentaid.ed.gov/students/at...rmulaGuide.pdf
^^ Fafsa EFC formula - very long but interesting if you are like me and really need to know how they arrive at the numbers. Interesting information such as asset protection tables etc. This is this years - it changes annually.
www.finaid.com
^^ lots of helpful tips about financial aid including a pretty accurate EFC calculator.
Things I wish I'd known long in advance:
Parents with income below $49,999 who are eligible to file a 1040ez or 1040a may qualify for the simplified needs test which means assets are not taken into account in the EFC calculation. Parents with income below $20,000 who are eligible to file 1040ez/1040a may qualify for automatic zero EFC. Weird things may make you ineligible. In our case we overpaid our state taxes in the prior year and took deductions so the state tax refund we received is taxable income that we
have to file a regular 1040 to report. Cost us a bit of money on the EFC even though the income figure were the same either way.
Odd little things can make a big difference.
Assets in students name = 20% goes towards EFC - no protection
Assets in parents name = 5.6% goes toward EFC - protection depending on older parents age. Single parents get royally screwed. IRAs/401ks (balance not that years contribution)/primary residence exempt from calculation
Income in students name = anything over @ $3,000 50% goes to EFC