If you have more than one child in college, big changes are coming this fall that may impact how much you pay in tuition.
The sibling discount currently available under the Free Application for Federal Student Aid (FAFSA) to families with multiple children will go away due to legislation that simplifies the form that determines financial aid.
The new FAFSA form becomes available in October, and it will determine aid eligibility for the 2024-2025 school year.
The changes will not impact low-income or upper-income families. It’s the middle and upper-middle class who will be hit, said Jacque Discenza, founder and president of Sarphatie Education, which helps families with the college admissions and aid process.
“It all depends on the bottom line of your 1040, which is your gross income,” Discenza explained. “Studies have recently found that it could actually double some college costs for each child.”
A new Brookings Institution report shows with the changes, students with siblings in college may be impacted depending on the family's income. For a family with a $150,000 household income, the Brookings chart showed that it would lose $5,000 in aid at public colleges and $12,600 at private colleges.
But that’s for middle-income families, Discenza said.
“If your expected family contribution is zero, it’s still zero," Discenza said, noting there is no impact on lower-income families. Upper-income families do not fill out FAFSA forms as they do not expect financial aid. The overhaul to the financial aid form is to encourage more low-income families to submit the form to get federal financial aid.
The new FAFSA due out this fall has 36 questions, down from 108. The sibling discount is going away in the new formula. Depending on the family’s financial circumstances, it could add up to hefty amounts of lost financial aid.
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Many families planned ahead when contributing to 529 savings plans, assuming costs would be reduced when their second child attended college, Discenza said.
“For more recent families that have the first one in college, I’ll make a point of noting the new formula when planning ahead,” Discenza said. “If they have one in college and they’re getting aid, I tell them not to expect more when the second one attends.”
The FAFSA form asks for tax returns, savings and investment information. It is completed by students and families annually to receive financial aid from the federal government. That aid include grants, work-study jobs and low-interest federal loans.
FAFSA is also used by states and colleges to determine eligibility for other financial aid, including loans and scholarships. About 13 million students submit the FAFSA each year and secure about $120 billion in aid, according to the College Board.
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