Consider contributions to a non-qualified deferred compensation plan, if available through your employer. These plans allow you to reduce your income, by electively deferring income into a non-college year.
As an employee of XYZ Inc, Joe earns a wage of $90,000. Joes employer offers a non-qualified deferred compensation plan, that allows him to make a elective contribution to a retirement plan through salary reduction. Joe elects to contribute defer $5,000, thus increasing his child’s financial aid eligibility by $2,350 ($5,000 x 47% = $2,350).
If your income is assessed at the financial aid income assessmetn rate of 47%, you could increae your child’s financial aid eligibility by up to $470 for every $1,000 of wages that you defer.