Financial Aid: the Sibling Factor

by Robyn Stewart, former financial aid officer at College of the Holy Cross

The Sibling Factor: How EFC and Financial Aid Packages Can Change

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: 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. (The other most common reason for changes to financial aid eligibility is a significant change in family income.) Why does the sibling factor affect financial 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. Remember, families need to apply for financial aid each year. The Expected Family Contribution (EFC) can change 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. Both siblings will have approximately the same EFC since they both use the same parents’ tax information, while their individual incomes and savings create slight variations. 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. Not every college works this way, though. Some colleges can’t afford to split the EFC equally with the college their student’s sibling attends. 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. And if the student’s EFC is too high when she is alone in college, dividing it in two or three when her siblings enroll in school might not be enough to create aid eligibility. How does the sibling factor affect financial aid for graduate students? While we’ve focused on undergraduate enrollees above, there’s a glimmer of hope for the panicked parent whose graduating college senior immediately heads on to graduate school. Oftentimes, a parent  can show their younger sibling’s colleges that payments are still being made for this graduate education. Those costs incurred for graduate school might also impact an undergraduate child’s financial aid eligibility.