Children are expensive to raise. There are the diapers, the clothes they’re constantly outgrowing, the extracurricular activities, the car insurance, and—yes—the college. Especially the college.
While the prospect of paying for college for a child—let alone two or three or four kids—can be overwhelming, understanding how the financial aid formula works can help you to manage college costs and be prepared for college payments for all of your children. So how does the number of kids you have affect your financial aid eligibility*?
Children in Your Household
The size of your household enters the financial aid equation in the form of a number called the Income Protection Allowance (IPA). This IPA is meant to account for the basic (think “bread and water” basic) living expenses of a household and is subtracted from the total income you report on your financial aid application to get at your discretionary income—that which is left over after your necessities are taken care of. Your Expected Family Contribution (EFC) is calculated on a sliding scale as a percentage of this discretionary income. The amount of your IPA is based upon your household size, so the greater the number of children (or others you’re providing more than half of the support for) in your household, the larger allowance you’ll receive for living expenses. Note, however, that the difference an extra household member makes to your aid eligibility is relatively small compared to other factors in the financial aid formula. For the 2020/21 school year, for example, going from a household size of three to a household size of four might increase aid eligibility by, at most, $2,600. For lower income families, the difference will be much smaller.
Children in College
The factor that has the potential for dramatically affecting your aid eligibility is the number of children you have in college. Your calculated Expected Family Contribution (EFC) is split between all of the children you’ll have enrolled at least half-time in a program that leads to a college degree or certificate in the school year in question. How that contribution is split, however, depends on whether your children attend colleges that only require that FAFSA to apply for financial aid or those that require the CSS Profile in addition to the FAFSA.
- FAFSA-Only Colleges
At FAFSA-only colleges, your calculated Parent Contribution (PC) is divided equally among all children you’ll have enrolled in the given academic year. For example, a family with a $30,000 Parent Contribution with two children in college will be expected to contribute $15,000 per child. The same family with three children in college will be expected to contribute $10,000 per child. A given set of parents is always expected to contribute the same total amount—that amount is simply divided equally among their children.
- CSS Profile Colleges
Colleges that utilize the CSS Profile financial aid application, however, generally abide by the theory that parents who have more than one child in college simultaneous should, in fact, have a greater expectation in terms of college payments. They will site, to make this point, the unfairness inherent in the federal formula that expects parents of children spaced four years apart in age to pay twice as much in total for college as parents who have twins. To offset this presumed inequity, the Profile formula, generally expects parents with two kids in college to pay 60% of their Parent Contribution for each child (120% of your PC if both children attend Profile schools) and parents with three kids in college to pay 45% of their Parent Contribution for each child (135% of your PC if all three kids attend Profile schools).
Some colleges that use the Profile, instead of using the default 60% or 45% contribution, will actually dig deeper into your finances and expect you to devote a greater portion of your resources to children attending pricey private colleges than those attending less expensive community colleges or receiving substantial scholarships. The family grid on the Profile collects this type of enrollment information and allows for a more sophisticated accounting of parent expenses than does the FAFSA, which just asks for the number of children in college and does not track what type of school they attend or its cost.
An understanding of how the number of children you have in your household and in college can help you in planning for college costs. You need to apply for financial aid every year, and, as additional children enroll in or graduate from college, financial aid eligibility can increase or decrease in response. If you’re unsure of how changes in your household or sibling enrollment statuses will affect future financial aid eligibility, feel free to contact the Financial Aid Office at your child’s current or prospective school for guidance.
*This article speaks to the current calculation of the Expected Family Contribution (EFC). The stimulus bill passed at the end of 2020 made substantial changes to the FAFSA and the federal financial aid formula. Beginning with the 2023/24 academic year, the EFC will be replaced by a number called the Student Aid Index (SAI). The SAI will not be divided among the number of children in college. A family with a $30,000 SAI will have a $30,000 SAI for each student in their family, regardless of how many students are enrolled. It remains to be seen how the CSS Profile, and the colleges that utilize that form, will respond to the recent federal changes.