When you apply for financial aid, the government uses a specific math formula to decide how much your family should pay for college. Most people think this process is completely random, but you can actually learn how the formula works ahead of time.
The formula looks at the money in your bank accounts. It expects students to contribute a much larger percentage of their savings toward college than it expects parents to contribute. Because of this, holding savings in a parent account rather than a student account usually results in a better financial aid offer. You should look into how your family savings are structured before you apply.
The good news is that money saved in official retirement accounts like a 401k or IRA is completely ignored by the formula. The government only looks at your regular savings and your income, so parents do not need to worry that saving for retirement will ruin their child's chances at financial aid.
The financial aid forms ask for your tax information from two years ago. Sometimes a family's financial situation changes a lot in those two years. If a parent lost a job or had big medical bills, you can contact the college financial aid office and ask them to reconsider your offer. This is a very normal process, and many schools are happy to help, but you have to be the one to ask.
Action step: Use the free financial aid estimator on the student aid government website. It takes ten minutes and will give you a very solid idea of what to expect.