The Sibling Factor in Financial Aid

Employee college cost worries don't end when they send their first child off to college.  Guest blogger, Robyn Stewart, Senior Manager of College Finance at College Coach and former Financial Aid Officer at the College of the Holy Cross, writes about the special financial challenges parents face when they have multiple children enrolling in and graduating from college.

When I worked in a Financial Aid Office, there was something that I could count on without fail every year. Whenever a student's sibling graduated from college, I would inevitably get THE CALL from parents wondering, "Where has our financial aid gone?"

Behold the Sibling Factor.

Essentially this is the effect on financial aid awards when siblings enter or leave undergraduate study. Parents might be delighted at the effect of a second child entering college (packages may increase). They get panicked, however, when a sibling leaves undergraduate study, and aid amounts for remaining undergraduate children decrease. Why does the sibling factor affect aid packages? When a family has two or more children attending college at the same time, the calculated Parent Contribution is allocated among all the children attending college. Though you may wish that the financial aid application process was a one-time distraction for your employees, and that once their oldest child goes off to college, you will have focused and engaged employees again, unfortunately, this is not necessarily the case.    

Families need to apply for financial aid each year they have a child enrolled in college, and, of course, many working parents have more than one child. The Expected Family Contribution (EFC), calculated when a family applies for financial aid, can change from year to year based on how many siblings are in college simultaneously. Families with multiple children in college at the same time may have greater financial aid eligibility. This is because the financial aid formula acknowledges the family's obligation to each college student in the household. The common scenario for most families with multiple children is that when the eldest child starts college the EFC is highest, since there are no additional college costs for other siblings.

When a younger sibling enters college, the EFC for the eldest sibling is roughly cut in half to account for the additional family costs incurred. However when the eldest sibling leaves college, the EFC for the younger sibling increases to reflect that the family again has only one child in college. This is what generates panicked calls to the Financial Aid Office. Note that not every college treats sibling enrollment the same way however. Some colleges can't afford to split the EFC equally with their student's sibling's college. Others may take into account their relative costs and make less of a reduction for, say, a sibling in community college vs. a student at a more expensive state college. Some colleges will account for siblings in graduate school, and some will not.  And if the student's EFC when she is alone in college is too high, dividing it in two or three when her siblings enroll in school might not be enough to create aid eligibility. No matter what your employees' particular situations, College Coach is there to ensure a smooth financial transition as children enroll in and graduate from college.  College Coach provides long-term college planning assistance to employees, with programs ranging from Saving for College for parents of young children to Student Loan Repayment for college graduates. 

College Coach's long-term approach to college financial planning, with counseling provided along every step of the college path, helps to ensure that parents are not blindsided by changes in financial aid eligibility, and, when you see your employees on the phone, you can feel confident that those are business calls they're making, not panicked calls to the Financial Aid Office!

Fine Tune Your Tuition Program

Written by: Shannon Vasconcelos

About the Author

Shannon works with Bright Horizons Education & College Advising corporate clients to deliver college financing workshops and provide personalized counseling to employees. She has over 10 years of experience in student financial assistance, at Boston University and Tufts University, and has also served as an active member of MASFAA’s Early Awareness and Outreach Committee, as a trainer for DOE’s National Training for Counselors and Mentors, and as a volunteer for FAFSA Day Massachusetts.