Many families need their high schoolers to contribute to steep college bills. They also worry student earnings will affect potential financial aid.

Student income and savings are two factors that financial aid forms — the Free Application for Federal Student Aid and the CSS Profile — use to calculate what’s known as the expected family contribution, a measure of a family’s financial strength and eligibility for financial aid.

But before worrying about the effect of student finances, here’s what to know.

[Understand how expected family contribution is calculated.]

Typically, parent s’ income affects the EFC the most, more than parent savings and more than student earnings and savings. Although student income and savings are calculated at a higher rate, most teens don’t earn or save enough to inflate the EFC in a meaningful way — unless they have a lucrative modeling career or a well-funded custodial account in their name, college financial experts say.

John Falleroni, a ssociate d irector of f inancial a id at Duquesne University in Pittsburgh, says more families are shocked to learn what parents are expected to contribute than how student money affects the EFC .

Financial aid forms calculate the EFC with prior-prior tax year’s income, so for the 2018-19 academic year, that’s the 2016 tax return for you and your student. Non-tax-filing teens can simply list W-2 or 1099 income.

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A portion of student income is shielded. Financial aid forms calculate 50 percent of student income toward the EFC. Fifty percent sounds hefty, but the federal calculation shelters a chunk from being counted: F or 2017-18, it’s $6,420. Tax allowances — FICA, state, etc. — protect a bit more.

Above that, student income begins to count. For example, on $2,000 above the allowance, $1,000 goes toward the EFC. But students will have netted some $7,000 to help pay college bills, so consider the trade-off. Keep in mind, many high school students don’t earn above the allowance threshold, at least in her area, says Luanne Lee, certified college financial planning specialist and owner of Virginia-based Your College Planning Coach.

Depending on EFC methodology — there are several — generally 20 or 25 percent of student savings factors into the EFC. In contrast, parent assets are calculated around 5.64 percent.

“On $10,000 in savings, the school might want $2,000 if it belongs to the student and $564 if it belongs to the parent,” says Stephanie Hancock, California-based financial planner for Hancock Wealth Advisory and financial aid consultant with College Aid Consulting. For some families, that difference could affect financial aid, but for many it won’t. Unlike income, savings are calculated in a single snapshot on the day you file your financial aid form.

Sometimes, tapping student savings makes sense. If your teen needs a laptop or dorm supplies, purchasing the items before filing shrinks that snapshot of savings — even if you pay your student back later. If a student intends to buy a car for college, purchasing before filing also makes sense.

However, don’t encourage spending to drain an account if your student needs cash to pay for books and other expenses. You’ll need the money to be available, Lee says.

Also, moving substantial student savings around to hide it could raise a red flag. Falleroni sees updated FAFSA forms come across his desk. If a student has a $30,000 savings balance listed on one form and zero on the updated form, he pays attention.

[Explore ways to vary college savings strategies.]

Beware of custodial accounts, however. Uniform Gifts to Minors Act or Uniform Transfers to Minors Act trust accounts are the child’s asset, assessed at the student savings rate, and big balances can spike an EFC. Plus interest, dividends or capital gains count as student income. A savvy financial planner can help assess these accounts for their effect on financial aid forms, Hancock says.

A low-income family with a hard-working student could see its EFC inflated by student earnings. But generally, experts say, students shouldn’t avoid saving to boost potential financial aid. Many families won’t receive federal need aid other than subsidized loans anyway , because they earn too much.

Private colleges may offer institutional need-based aid, and even families with incomes of $125,000 or higher can qualify at the right school, but they’ll still have a bill to pay. Savings will help.

According to Hancock, figuring out how to pay for college — and applying to the right college for the family’s financial profile — will be more useful than simply counting on financial aid, particularly federal aid. Even if you receive federal aid, Falleroni cautions, “The buying power of Pell G rants isn’t great these days. If you have the ability to save, you should. The incentives to save are far greater than rolling the dice and playing FAFSA roulette.”

Lee advises families to calculate their EFC as early as possible while their student is in high school and allocate assets in ways that penalize them less. For most families, particularly those eligible for Pell Grants, every strategy helps. That probably also means teens won’t want to skip working or saving.

Trying to save for college? Get tips and more in the U.S. News College Savings 101 center.

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Teens’ College Income, Savings May Not Affect Financial Aid as Much as You Think originally appeared on usnews.com