The formula for financial aid counts assets in the child's name as being highly available to pay college costs, while parental assets are much less so.
Family A: parents have $10K, child has nothing
Family B: child has $10K, parents have nothing
Family B will be calculated to have more money available to spend on college (OBVIOUSLY the child should pay for college out of his own assets first...) and will get less financial aid. This will be true 18 years from now even if the system is tweaked slightly in the meantime.
The average American kid has an IQ of 100 and will attend a state subsidized community college, trade school, etc. They need to minimize loan interest and time spent working their way through school with menial jobs, not worrying about the exact financial aid efficiency of Harvard.
Family A: parents have $10K, child has nothing
Family B: child has $10K, parents have nothing
Family B will be calculated to have more money available to spend on college (OBVIOUSLY the child should pay for college out of his own assets first...) and will get less financial aid. This will be true 18 years from now even if the system is tweaked slightly in the meantime.