The Sibling Discount

August 16, 2023

A recently passed bill by the United States government is now changing the new federal financial aid formula that used to take family size into account for costs. The Sibling Discount has now come to an end. This will have a substantial effect on households with numerous children in college at the same time. With the new ruling, parents who are paying tuition for two or more children now will lose some financial aid under new regulations. 

For a long time, the calculation for federal financial aid help took into account a family’s salary and resources, as well as the number of children going to school. The data was utilized to decide how much a family might bear to pay every year, a number called the “expected family contribution.”

The Department of Education previously divided the so-called “expected family contribution” to estimate how much parents would be able to contribute to each child. This “per child” number was used to determine what each child was eligible for concerning federal financial aid. Now the Department of Education will look at each child and family individually instead of as a family unit. 

Changes to Federal Financial Aid will become official in the Academic Year 2024-2025. This change is intended to make more students eligible for federal aid such as Pell Grants. Although in the current landscape of college education, more than one-third of dependent college students also have a sibling who is in college as well. Financial aid experts now believe that this will severely alter the amount of aid that is provided which will lead to an increase in loans. ‘“The college-pricing system is going to change dramatically,” Levine said. “The majority of students are going to be eligible for a different amount of financial aid next year than they were last year,” he said, referring to the school year beginning fall of 2024.”’ (Adedoyin)

New Formula

The new formula that the Department of Education will take into consideration while determining financial aid will be known as the “Student Aid Index or the SAI”. This new process will no longer consider the number of siblings who are also attending college when measuring a family's ability to pay.  For example, the current formula and policy in place would determine that a family can pay $10,000 for one child. If that same family then had two children in school then the expected contribution would be cut directly in half to $5,000. This would then increase both of the students from the same family's financial aid ability. Going forward, the Department of Education “Rather than looking at the family as a whole, they are looking at each student individually.”(Adedoyin). In many instances, this will cause the expected family contribution to double or even triple depending on how many children are in school simultaneously. 


Numerous students going forward will have more access to federal financial aid grants due to the new system that is being installed. The new policies will raise the family income threshold to qualify for the most amount of money possible from maximum Pell Grants. Brad Barnett who is the associate vice president at James Madison University believes that the new FAFSA will make college aid more affordable for families with only one child. He believes that for all families college aid will become more predictable in the long run due to the new FAFSA policies being put into place in the academic year of 2024. “As long as a family’s income stays relatively the same, then any need-based financial aid that a student is offered in the new world will likely remain pretty stable during the student’s school career,” he said. (Adedoyin)


Adedoyin, O. (2023, July 18). The sibling discount ends for College Financial Aid. The Wall Street Journal. 

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