Cram for college costs in 5 years or less

Contribute more to your 401(k). Money in retirement funds generally isn't included in financial aid calculations, and in a pinch you could borrow from your 401(k) to pay tuition, although you're usually better off with a school loan or home equity line of credit.

Such a thing as too much income

You have to use some common sense when employing college-preparation strategies. It usually doesn't compute, for example, to turn down a raise just because it may cut your child's financial aid package by a few bucks next year.

There is one situation, though, where temporarily reducing your income can more than offset the forgone income, and that's when your household adjusted gross income could be reduced below $50,000.

When your income is that low, the federal aid calculator no longer factors in any assets. If you have substantial savings and can get your income below that threshold -- with an unpaid leave of absence, say, or larger contributions to your 401(k) -- the temporary sacrifice of income could pencil out.

Divorce might work for you

Two households can be better than one when you consider the potential impact on financial aid.

When parents are divorced or separated, it's the custodial parent -- the one with whom the student lives most of the time -- who fills out the FAFSA. (It doesn't matter who contributes more or who claims the student as a dependent on their tax returns.) The income and assets of the noncustodial parent usually aren't considered. If the custodial parent has remarried, though, her new spouse's earnings and property typically must be included on the form.

Given these realities, here are some ideas to consider:

• Have the student live with the less-affluent parent.

• Delay remarriage if you're the custodial parent and if your intended is willing to wait until the last FAFSA has been filed (in the student's junior year of college).

Grandparents can help

If your folks can afford it and are willing, they can be a huge help if they:

Make contributions to 529 plans. Special rules allow a grandparent to make a one-time contribution of up to $60,000 per student to a 529 college savings plan without gift tax implications. (Gift tax returns normally have to be filed for any gift worth more than $12,000 per person, and the amount over that limit is deducted from the giver's $1 million lifetime gift tax exemption.) The grandparent retains control of the 529 money until it is disbursed, and the account typically is not considered at all in financial aid calculations.

Delay giving money until after college graduation. Some grandparents opt to pay the students' tuition bills directly because they can do so without gift tax consequences. The problem is that such largesse can reduce the student's financial aid package dollar-for-dollar, Kantrowitz said. A better approach would be to wait until the student is out of school and then gift the money to pay down any student or parental loans.

Strategies likely to flunk

Independent status. It's much tougher to be considered independent for financial aid purposes than it was a generation ago. Typically, schools don't consider students independent unless they are at least 24, married, in graduate school, orphans, veterans or have dependents of their own.

Even if the student is entirely self-supporting and isn't claimed on a tax return as anyone's dependent, the parents' income and assets are still considered in aid awards.

Fraud. Supplying phony tax forms, hiding assets or lying about your family circumstances should be nonstarters. Those who get caught now face $20,000 fines and the possibility of jail time. Besides, fraud reduces the pool of money that's available to people who really need it, and that's just bad karma.

Liz Pulliam Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "Your Credit Score: Your Money & What's at Stake." Weston’s award-winning columns appear every Monday and Thursday, exclusively on MSN Money. She also answers reader questions on the Your Money message board.

Updated May 20, 2009

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