Your expected contribution to your medical school education is determined by your FAFSA, which does not look at family income.
That's incorrect. People really need to actually *look* at the official FAFSA worksheet. There are a few basic concepts in there...
http://studentaid.ed.gov/students/attachments/siteresources/0708EFCFormulaGuide.pdf
Zero EFC:
Dependent and your household has someone on Federal aid?
Independent and you, your spouse, or your dependents were on Federal aid *and* you have a dependent other than your spouse?
Dependent and your parents have AGI < $20K and they filed 1040EZ/1040A?
Independent, you and your spouse have AGI < $20K, *and* you have a dependent other than your spouse?
"Simplified" EFC (ie, complete asset protection)
Dependent and your parents have AGI < $50K and they filed 1040EZ/1040A?
Independent, you and your spouse have AGI < $50K, *and* you have a dependent other than your spouse, *and* you filed 1040EZ/1040A?
For AGIs above this, the government takes a vig from both assets *and* income. There is an allowance, similar to a tax allowance, to protect a certain amount of both assets and income. The asset protection runs on a sliding scale, based on the ages of parents (for dependent students), and the student themselves (for independents).
Above the allowances for both income and assets, there is a multiplier, which is the percentage of assets taken as vig. Until last year, for dependent and independent students, this was 33%. This year it's dropped to 20%.
Parents of dependent students get their assets stripped at 12%. Dependent and independent students get their previous year's AGI stripped at 50% (!). That's why helpful grandparents (or parents) giving the student "money for college" is a bad idea. By all means do so, but only after the student has graduated.
There's no real magic to this, it's a simple spreadsheet. Don't use the black box approach on the onlnie FAFSA or the websites, just crank up Excel or Google spreadsheet and plug in the numbers yourself. It takes like 10 minutes to set up. If you can learn the damn Krebs Cycle you can do this.
E&OE