Since medical expenses in excess of 3.5% of financial aid income are a deduction in the IM formula, the client should time the payment of medical expenses. The payment of medical expenses should be delayed or accelerated into college years in order to receive the full benefit of the medical expense deduction.
The parents reduced their income by $5,000 by timing medical expenses. Since the parents income was assessed at 47% the increased financial aid deduction may increase the childs financial aid eligibility by $2,350 ($5,000 x 47%).
If you are in a financial aid income assessment rate of 47%, you could increase your financial aid eligibility up to $470 for every $1,000 of increased financial aid deduction by timing medical expenses.