Interesting discussion. I'm in a different situation, low income, larger family size, little taxable savings, kids in and out of college as well as approaching. I'll just throw out some of our experiences to date with financial aid.
Aid varies wildly from school to school, regardless of your EFC. DD1 began college in 2008, and our EFC was effectively zero, yet her first choice college gapped her $16k. Needless to say, she was very happy at her second choice college where we paid very little out of pocket (she did have WS and subsidized loans), despite costing $54k per year by her senior year. She did miss out on a full ride scholarship at a state University, all because she neglected to update her SAT scores when they improved. We only learned about the scholarship in her acceptance letter, after the deadline. She didn't want to attend there anyway.
DS2 got a better FA offer from his second choice, and used that to get his first choice school to increase his aid; they beat the offer in an attempt to keep DS2, and he really preferred them and let them know. Last summer, he earned enough money that it affected his aid. He went back to FA, and managed to get some aid restored for this year (his senior year).
DD3 just returned to her state University for her second year. I have seen how aid has changed, just in the years since DD1 began in 2008. Some of the FAFSA charts are adjusted for inflation, but some seem to be going the opposite direction. The threshold for the auto zero EFC dropped from $32k income per year to $23k, now $24k. We used to make the $32k cutoff, but $24k is out of reach right now. The chart for asset protection has dropped over the years, I couldn't believe my eyes when I compared 2008 to later year's FAFSA charts. Certain aid programs have disappeared. TAP seems to always be underfunded. Student loans are slowly shifting to more unsubsidized, grace periods are disappearing.
Loans tend to be the first aid given, and other aid is tied to accepting the loans. When DS2 was first offered unsubsidized loans, we suggested he decline them. He was told that he could not get his other, more favorable loans unless he also accepted the unsubsidized ones.
My larger point is that financial aid may have entirely different rules by the time your children hit college, so flexibility may be your best bet. Watch the current rules, watch trends, diversify. Make sure your kids are in demand to colleges, so they will be courted with merit aid. Explore which colleges give merit vs need based aid. Consider colleges that do not charge tuition - students are expected to work in some way. Explore local scholarships thru the kids' school district - many small organizations go thru the HS guidance office for candidates, so you must be sure to apply for everything you might be eligible for. We've also gotten small scholarships thru our church.
