Strategies To Protect Your Sibling Discount

UPDATED May 2024 — 

Are you headed to college this fall with a sibling or two? In the past, many families were granted extra financial help from the federal government if they were shouldering two or more students in college. But that “sibling discount,” as it was known, has ended.

This year’s FAFSA did ask about the number of children attending college in the 2024-25 school year. But this information won’t automatically boost the amount of federal aid that a low-income family might receive, as it did in the past. Students with siblings currently in college will likely receive less federal aid next year, as will new students who are just arriving.

 

New Rules for the New FAFSA

As most families know by now, the Free Application for Federal Student Aid got a makeover this year.

Among the welcomed changes are a shortened and simplified form and more generous criteria for Pell Grants — free government money for college students with the greatest financial need.

While many students will receive more federal aid under the new FAFSA, one group will be worse off: families with more than one student in college.

 

Goodbye Sibling Discount

Parents and counselors are used to seeing the term Expected Family Contribution, or EFC, to describe their eligibility for federal aid. The lower the number, the more aid a student might be eligible for. Very low-income students, for example, would see an EFC of $0.

In the past, a lot of factors went into the EFC, including the sibling discount, which took into account how many children from the same family were attending college at the same time. A student’s EFC was cut in half  —  meaning they would likely be eligible for additional federal student aid — if the family had two kids in college at the same time. The EFC was cut by two-thirds if a family had three kids in college at the same time, and so forth.

The new FAFSA formula is called the Student Aid Index, or SAI. Similar to the EFC, the lower the SAI number, the more federal aid a student is eligible to receive. But there are a few key differences. Among them, the SAI does not allow for a sibling discount.

What does this mean? The amount of federal aid a student is eligible to receive will no longer increase if that student has one or more siblings attending college at the same time.

 

Who Gets Pell Grants

Under the new FAFSA, ​​students whose family income is below 225 percent of the poverty threshold for married couples (or 175 percent for single parents) automatically qualify for the maximum Pell Grant. For these individuals, the lack of a sibling discount won’t affect their federal aid eligibility, notes an analysis by the Brookings Institution.

On the other end of the spectrum, higher-income families typically make too much money to qualify for federal Pell Grants anyway, even when they have more than one child attending college at the same time.

 

Middle-Income Families Hardest Hit

According to a useful calculator published by Brookings, a student with one sibling in college whose household makes around $70,000 will receive $2,000 less in annual Pell Grant funding under the new FAFSA formula, compared to the old one. Students in similar income situations with two siblings in college will see an even bigger drop in their federal aid under the new rules.

Families can now get an estimate of how much federal aid they may receive under the new SAI formula using the federal government’s Federal Student Aid Estimator. Anyone curious about how the SAI will affect their family should run the numbers.

 

What To Do Next

Many parents have been asking how to keep their sibling discount and get help for siblings headed to school in the 2024-25 college year. It won’t be easy, but there are two options to consider:

  • First, college financial aid officers must distribute federal aid using the Student Aid Index calculation. However, these folks do have some leeway if your family situation is particularly challenging or dire. They can use their “professional judgment” to adjust your federal aid in special cases.

 

  • Second, colleges are free to consider other factors when giving you their own institutional aid, which is money drawn from their endowment and privately funded scholarships. Many expect that colleges will be open to adjusting aid packages this coming year, at least for students already in college who may be blindsided by the new federal formula.

 

Three Strategies

Speak up now. If your financial aid offer is simply too low given the number of kids you have in college, let you financial aid officer know now, being sure to CC the admissions office as well. The same is true if you are a current college student facing a drop in aid for the coming school year. Financial aid officers are still struggling with FAFSA delays and may not be able to address your needs for another month or two, but it’s good to make your case as soon as possible.

Make sure to tell the financial aid officer that you have a sibling (or two or three or four) in college and your family cannot afford to pay tuition for all without significant help. If there are other extenuating circumstances that will not be captured by the FAFSA or, if applicable, the CSS Profile, describe what is happening in your family and make your best financial case.

If your child is in the Class of 2025 and you are in the hunt for schools next year, look for colleges that give lots of aid. You can identify these schools by using each college’s net price calculator, which gives you an estimate of how much aid you’ll get from a given school. Each college is required to have one posted on their website. These calculators should be updated to factor in the new FAFSA rules. They also take into account the school’s own policies for using institutional aid and privately funded scholarships.

 

How Do I Find Colleges That Give Lots of Money?

Five Tips for Using a College Net Price Calculator