A RECENT SURVEY showed that 57 percent of all students now attending college are eligible for some form of aid. The figure is even higher at private schools. The National Association of Independent Colleges and Universities recently reported that more than two of every three full-time, dependent undergraduate students at private institutions are receiving some form of federal aid.

No family, experts say, should automatically assume that it won't be eligible for financial aid. Even families with annual incomes in excess of $100,000 frequently may qualify for aid if their educational expenses are high enough (a function of how many dependent children are in school and the costs at their respective institutions).

The lesson in all this is that parents with college-bound children should not be satisfied simply with knowing whether they might be eligible for financial aid. They need to understand, and the earlier the better, exactly how eligibility for aid is computed. It may turn out to be the single most important factor in where their children go to college and how much their educations eventually will cost. Moreover, many families can maximize their eligibility for financial aid simply by planning ahead and structuring their finances accordingly. Consider these examples:

The Smiths have three children in school: a son in college, a daughter in public high school, and another daughter in a private high school. Over the years, the parents have put $2,000 in their son's savings account to help pay for college expenses. As it turns out, the Smiths also have $2,000 in outstanding credit-card debt. By using the $2,000 in savings to pay off the credit-card debt and by contributing $4,000 to their IRAs early in the tax year (thus reducing both the family's adjusted gross income and available assets), the Smiths can increase their financial aid eligibility by more than $1,000 per year.

The value of the Johnsons' home has appreciated sharply over the years -- enough so, in fact, to render the family ineligible for financial aid. So they take out a sizable second mortgage on the house and invest the cash in a single-premium life insurance policy, which makes the most of tax-free compounding. For financial aid purposes, home equity counts as an asset, but the cash value of an insurance policy doesn't. The Johnsons have thus reconfigured their assets in such a way as to make their college-bound daughter eligible for financial aid. They then borrow against the policy to make tax-deductible interest payments on their second mortgage, letting the principal roll over until their daughter graduates from college. Best of all, the loans don't even have to be paid back (they do, however, reduce the death benefits ultimately paid to beneficiaries).

The Brown family has two children, one year apart in age and both in high school. The older student takes a one-year "sabbatical" from studies after his senior year in high school, so that both children will begin -- and end -- college at the same time. When the Browns apply for financial aid, their expected contribution to college costs is divided by the number of children in school. By having two children in college at the same time for four years instead of just two, the family has substantially enhanced the amount of financial aid it can receive.