How Having Multiple Children in College Affects Financial Aid

The cost of sending multiple children to college could more than double for some families as a result of recent changes to the way the Free Application for Federal Student Aid, or FAFSA, calculates financial aid eligibility when siblings are enrolled simultaneously, experts say.

Housed within the Consolidated Appropriations Act of 2021, an omnibus spending bill signed into law this past December, the FAFSA Simplification Act of 2020 eliminates the discount currently available for families with multiple enrolled children starting in the 2023-2024 academic year. The FAFSA that will become available on Oct. 1, 2022, will continue to ask how many children in a family are enrolled in college, but this information will no longer be a factor in determining a student’s aid eligibility.

Starting in about two years, the changes resulting from the FAFSA Simplification Act will cause a family’s out-of-pocket costs after financial aid to be the same regardless of the number of children enrolled in college. This will be an unwelcome surprise to many families, according to Joe Messinger, co-founder and director of college planning at Capstone Wealth Partners, who notes a petition circulating with nearly 5,000 signatures that advocates for a reversal of the change to how the FAFSA treats multiple children in college.

As a rough example of the change’s effect, he says “if you’ve got a teacher and a firefighter making $100,000 combined, (the FAFSA) wants about 20% of your income going toward college. If you’ve got two kids in this family, the cost used to be $10,000 each. Now they’re saying it’s $20,000 each and they’re expecting you to pay $40,000 total for college that year.”

[Read: Everything You Need to Know About the 2021-2022 FAFSA.]

In contrast, under current FAFSA rules, the calculation to determine the expected family contribution, or EFC — a number that measures a student’s existing financial resources to pay for college — takes into account whether a family’s resources may be diminished due to siblings’ college costs. So, for example, a family in 2021 with two children both enrolled in college would see its EFC cut in half; a family with three children enrolled in college would see its EFC reduced by one-third; and so on.

Experts advise families with both prospective college students and current freshmen and sophomores, who could see their financial aid drop for their junior and/or senior years, to plan accordingly.

“It’s going to be rough for these families–there’s no getting around that–and middle class families will likely be hit the hardest,” Shannon Vasconcelos, director of college finance at Bright Horizons College Coach, wrote in an email. “Barring a reversal, many families are going to need to deal with higher than anticipated contributions, and therefore lower than anticipated aid. They can make up this shortfall with savings, cash flow, or loans.”

The FAFSA Simplification Act replaces the EFC with the student aid index, or SAI, when the changes take effect. Similar to the EFC, this index amount will serve as a guideline for the level of financial aid a student might receive. But it will not consider how many children are enrolled in college at overlapping times when calculating a family’s ability to pay for school. Removing the existing discount, however, is unlikely to affect low-income families.

[Read: 5 Myths About Parent Information on the FAFSA.]

“For someone with a zero EFC, they qualify for the maximum Pell Grant — whether you have two children or three children, it doesn’t affect the EFC. Zero is still zero,” says Mark Kantrowitz, a financial aid expert and author of “How to Appeal for More College Financial Aid.”

The FAFSA Simplification Act also changes another aspect of how a family’s expected contribution is calculated: The law significantly increases the income protection allowance, which will help lower-income families by excluding more or all of their income from being considered in the financial aid eligibility calculation.

According to Vasconcelos, income protection allowances “are being increased across-the-board, but more so for families with multiple kids in college. For example, in the current IPA for a family of four with two in college is $26,570. Under the new rules, the same family will have a $35,870 IPA. A larger portion of their income will be excluded from the financial aid calculations. In the end, this extra protection will likely end up increasing financial aid eligibility by around $3,000 for families in this situation, all else equal.”

For families who will be affected by the upcoming treatment of multiple enrolled children, experts suggest saving at a higher rate, if possible, and appealing for more financial aid.

“This will put pretty severe pressure on families that have multiple children in college at the same time, especially when they have twins or triplets,” Kantrowitz says. However, families will still be asked to provide the number of their children in college on the FAFSA, “and there is the authority for colleges to make professional judgment adjustments based on that” — meaning schools can potentially provide more financial aid to a family based on its unique circumstances when an appeal is submitted.

[Read: How to Write a Financial Aid Appeal Letter.]

He notes that financial aid administrators may be reluctant to change a student’s eligibility, but if there is an extreme amount of overlap in the number of children enrolled in college, such as in the case of twins or triplets, a financial aid appeal may be successful.

Another option to prepare for the possible decline in financial aid eligibility is for prospective students to select a less expensive college. Or they may wish to consider a college that uses the CSS Profile, another application for financial aid that is used by many private schools and, as of now, still provides a discount to families with multiple children enrolled.

“Families who were counting on more need-based aid may now also want to give more thought to merit aid instead,” Vasconcelos says. “Encourage your children to apply to colleges where they will stand out or be well above average, and they will likely be recruited with non-need-based scholarship funding.”

Trying to fund your education? Get tips and more in the U.S. News Paying for College center.

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