COLLEGE AID AWAITS WISE PLANNERS.

Byline: Margaret O. Kirk The New York Times

Before any of their three children were in college, Neal and Betsy Boudette of Clifton Park, N.Y., took measures to increase their chances of getting financial aid, steps that included reducing their income and taking money out of their children's names.

The results? Last year, when the Boudettes earned a combined income of $82,000, their two daughters entered their freshman and sophomore years of college with financial-aid packages that totaled around $29,000, most of it in scholarships.

Now that their son has entered his junior year of high school, the Boudettes are further refining their financial strategy. Betsey Boudette is a part-time registered nurse and her husband is a chemical engineer, but they have started a home business selling sports athletic tape.

That venture not only fulfills a lifelong dream, but will probably also result in a tax deduction that will lower their income, just when looking financially lean could help translate into more aid for their son.

``Understanding how the financial system works and organizing your college financial aid strategy is very important and legitimate,'' said Philip C. Johnson, a certified financial planner in Clifton Park. ``There is no reward in heaven for paying extra money for college.''

With the cost of some private colleges exceeding $25,000 a year and many public universities averaging more than $6,000, financial aid has become an ever more vital piece of many families' college puzzle.

Families received $50 billion in aid during the current school year, most of it federal loans. About half of the people who applied for aid actually received it. And in a recent survey of 500 high school seniors by Careers and Colleges, a magazine for high school juniors and seniors, 26 percent said that a college's cost and financial aid programs were the most important factors in their choice of schools.

For families with college-bound students, the strategies for receiving more aid can be like year-end tax planning. Timing is crucial.

Financial aid is based on a family's income, assets and need; to determine the amount, colleges and other sources of aid look at your finances for the year before your child would start school. Typically, that year includes the second half of a child's junior year in high school and the first half of the senior year.

That means that any financial-aid maneuvering is best done before your child has even applied to college. A family whose child just entered the junior year of high school this fall has about a month left before its finances fall under the eligibility watch.

According to financial planners, here are three of the most widely used strategies:

Removing money from a child's name. When schools look at a family's assets and its needs, children are expected to spend 35 percent of their savings each year for school, but parents' assets are tapped at 5.65 percent. So money in a child's name will obviously decrease the family's need for aid.

Deferring income. If your employer gives you an annual bonus, try to receive it before Jan. 1. The same timing applies if you plan to sell stocks or other investments to help pay for college. Capital gains can raise your income significantly, and if you sell after Dec. 31, that increase in income hurts your aid eligibility next year.

Saving money in the right places. Though the rules vary widely, most schools do not include retirement funds like 401(k)s and individual retirement accounts when considering assets. So it may make financial sense to increase contributions to these accounts. But keep in mind that many private colleges, particularly in the Ivy League, include such accounts in their calculations.

Similarly, while most schools don't look at home equity, others do. If your school doesn't include it in the calculations, you can reduce assets by taking money from, say, your savings account and paying down your mortgage. And because consumer debt is not considered a deduction, tap into regular savings to pay off credit cards or other loans.

There are some risks. If you sell assets or lock away money in retirement funds as you jockey for financial aid, you may not have access to money when you need it.

``Families take the risk of putting the cart before the horse if you turn out to need those assets or income to pay for college, and either you no longer have them or can't get at them without substantial penalty,'' said Hal F. Higginbotham, vice president of student assistance services with the College Board, the research group that administers scholastic tests.

Financial planners and college experts urge families to look beyond financial manipulation in their efforts to receive aid. Although schools may not encourage the practice, experts say you should not be afraid to negotiate for more aid than the school initially offers.

The Boudettes were able to increase their younger daughter's financial aid package by $2,500, simply by asking for a second review.

If your family can really make long-range plans, have children close together in age. The more children in college at the same time, the more you qualify for financial aid.

The Boudettes will probably have all three children in college for at least one year. ``That,'' said Neal Boudette, laughing, ``is something we didn't plan for.''

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Photo: (Color) Neal and Betsy Boudette stand with two of their three children, Peter, left, and Linda, at their home in Clifton Park, north of Albany.

The New York Times