I'll have college age children soon. Each of them has an equities account in their own names, given by their grandparents. I'm in the top 5% of wage earners, topping $200,000 per year. My wife doesn't work but we have been good savers--our 401K and other savings amount to more than $2 million. I started working on a FAFSA aid estimate and soon concluded that there is no way we're getting any federal aid. I did not complete the FAFSA process. Was that a mistake? Or was my conclusion correct?
–P.J.

Even if your children don't qualify for need-based aid, there are still good reasons to submit a FAFSA, says says Mark Kantrowitz, author of "Secrets to Winning a Scholarship." Filling out the FAFSA (short for "Free Application for Federal Student Aid" is a prerequisite for the unsubsidized Stafford loan and the Parent PLUS loan, neither of which are dependent on financial need. So if you're thinking about taking out those loans to help fund your children's education, you'd need to complete the process.

And despite your healthy finances, there are circumstances under which your family might indeed qualify for financial aid, which is calculated as the difference between the cost of attendance and the expected family contribution (EFC). While your income is high, you might qualify for some aid with two or more children in college, particularly if they're going to especially expensive schools. Additionally, if many of the assets you mention are in retirement accounts, those have nobearing on FAFSA calculations. The same goes for your home and any small businesses you may own.

An extra bit of advice from Kantrowitz: The equities accounts in the children's names will have a big impact on eligibility for need-based aid because children's assets increase the EFC by 20% of the assets' value. However, if you liquidate the accounts and roll them into the custodial versions of 529 college savings plan accounts, it will improve your eligibility for need-based aid. Assets in 529 plan accounts are treated as though they belong to parents, and are assessed at a much lower rate (the top bracket is 5.64%.)

-- Jeff Wuorio

Got a question for the help desk? Send it to