Education: Financial Aid 101

Democrats taking over congress say they want to make more financial aid available for college students. That's great, but parents have to do their part, too. Here's how to make sure your kids qualify for the help they need.

If your child is a high-school junior, make some fast moves now, since financial-aid officers will be scrutinizing your 2007 income. Sell any stocks that will produce big gains before the end of 2006, and take bonuses early.

If your child is a senior, start filling out the aid forms now. You can file your Free Application for Federal Student Aid form as early as Jan. 2 and put your child at the head of the line when aid is disbursed.

If your child is a high-school sophomore or younger, save what you can, but do it in a way that will not hurt his aid eligibility: the aid formulas really penalize kids with cash in their own names. Instead, invest in a 529 college savings plan or Coverdell education savings account (find both at savingforcollege.com) that is treated as a parent's asset, not the child's. Then sit back and see what happens first: your child matriculates or Washington comes through with that extra help.