When Two Children Head to College

Yesterday’s post, which explored the school options of a brilliant teenager from Wisconsin, generated many insightful comments from parents.  Here is the post:

Should a Kid Borrow $80,000 for a Brand-Name University?

If you missed the post or the comments, I’d urge you to check both out.

To summarize, the teenager managed to get admitted to some elite schools including Stanford, Johns Hopkins and Northwestern, but his affluent parents were only willing or able to kick in $10,000 a year. The schools gave the family about $120,000 in need-based aid (even upper-middle class families can get need-based aid from expensive schools), but the boy would still have to borrow at least $80,000.

I argued that borrowing that kind of money would be financially reckless.

Getting a Break With 2 College Students

Today I wanted to make one more suggestion. In her note, the mom said she and her husband were concerned about spending more than $10,000 a year on their son because they have another child who will be heading to college in two years.

Understandably, parents tend to freak out about the prospects of having two children in college at once. The cost, however, might not be as bad as they assume. That’s because the financial aid formula gives a break to families with multiple children in college.

CSS/Financial Aid PROFILE

Elite private institutions like Stanford, Northwestern and others on the teenager’s list use a financial aid application called the CSS/Financial Aid PROFILE. The PROFILE uses an institutional methodology that takes into account the number of children in a household – whether or not they are all in college.

The PROFILE also gives a break when two or more children are in college simultaneously.  When this occurs, the Expected Family Contribution for each child will drop by about a third.

So if the family’s EFC is $30,000 for the first-born, it will drop to about $20,000 when a sibling starts college. And the second child’s EFC would also be $20,000.

For schools that exclusively use Free Application for Federal Student Aid — and that’s the great majority — the EFC drops by about 50% for each child. Here is a post that I wrote about this:

Twins, Triplets and Quadruplets: Your Hidden College Discount

Because the private schools that the Wisconsin teenager wants to attend routinely meet 100% of their students’ demonstrated financial need, he would actually receive more financial aid for the last two years in college when his sibling is also in college.

If the high school senior wants to shrink the cost further, he could request a gap year from the schools. If he gets the go-ahead, he could delay beginning college by a year. By doing this, he and his brother would be in college for three years instead of two years, which would lower the family’s EFC and shave considerably off the price tag.

That said, I would urge the family not to saddle their children with more than federal student loans, which are the only loans with built-in protections!

What Should This Family Have Done?

Final thoughts:

This Wisconsin family, like millions of others, treated the admission process like a crap shoot. The parents encouraged the son to aim high and they hoped that they would get enough money from the schools to afford college, but they had no idea what would be in the financial aid packages. That’s a lousy way to go about it, but families aren’t getting the advice they need to approach this process as educated consumers.

What should families do instead? Before assembling a final list, a student should have a good idea whether he/she can expect money from individual schools and know what these institutions will expect the family to pay.

The elite schools that the Wisconsin teen aimed for actually award excellent financial aid packages. These schools, however, rightly expected the Wisconsin parents to kick what the financial aid formulas said they could afford. The family is affluent, at least based on their EFC, but they don’t have the cash. It’s an all-too-common problem.

Long before a child applies anywhere, parents should obtain a preliminary Expected Family Contribution by using an EFC calculator. This will give them a ballpark figure of what a school will expect them to kick in.  Families should also use the net price calculator that’s available on every school’s website.

Here are two posts for further information:

What is Your Expected Family Contribution?

College Cost Calculators: Getting Wildly Different Answers

Would have, could have, should have isn’t going to help this Wisconin family, but it could help you in the future.

 Read More from The College Solution:

Answering Readers Questions About the FAFSA

 

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7 Responses to When Two Children Head to College

  1. Linda Keyser-Smith November 14, 2014 at 3:43 pm #

    We have 8 internationally adopted children, three of whom graduate from high school this May and who all hope to go to college. Our income is middle class, and there are 10 of us living at home, our youngest 3 have large medical bills for chronic illness and medical disability. Is there consideration in the system for family size with medical expenses or should we just plan to have the same EFC as a healthy smaller family on the same income?

    • Lynn O'Shaughnessy November 14, 2014 at 4:07 pm #

      Hi Linda,

      The number of children that you will have in college at one time will significantly impact your Expected Family Contribution. With three in school, your EFC will drop by about 66% for each child. With the PROFILE schools the drop will also be significant. When appealing a financial aid award — if that’s necessary – you should ask for a “professional judgement” from the admission/financial aid office for your large medical bills that won’t be reflected on the financial aid forms.

      Good luck!

      Lynn O’Shaughnessy

  2. rh December 21, 2012 at 5:04 am #

    Susan is not correct, at least at the college I teach at. The VAST majority of foreign students pay 100%, that’s why they are recruited and that’s why our college campuses have so few US citizens. They aren’t going for free.

  3. cristina October 22, 2012 at 8:22 pm #

    This is for Susan who THINKS

  4. Susan Carrow April 23, 2012 at 5:00 pm #

    I have one more important comment I forgot to put down…I now have 5 grandson’s ranging from age 6mos. to 4 yrs. old and they will all be attending college someday and I sure don’t want them to have to suffer thru debt after debt trying to further their education….I sure hope by that time things will have changed and it will be somewhat easier for them….god, I hope so…

  5. Susan Carrow April 23, 2012 at 4:55 pm #

    I just have to say, I get soooo sick of these people who come from other countries and so many of them do not pay one darn cent in tution but our poor kids in the US take out debt after debt to further their education and try to make a good life for themselves…who the hell helps us here in this country oh sure we have some help availabe to them, more so if you are poorer but not like they do coming to this country….it is just so UNFAIR…my kids both have college educations and paid off their loans and it was damn hard and it just should not be that way…WE SHOULD PUT OUR HEART AND SOUL INTO DOING SOMETHING ABOUT THIS PROBLEM NOW!!!! THEY SHOULD NOT BE PUNISHED FOR GETTING FURTHER EDUCATION!!

  6. Barry April 20, 2012 at 6:34 pm #

    Hi Lynn —

    Does the financial aid formula gives a break to families with multiple children when one is in college and one is in graduate school?

    (Our two kids are 5 years apart in age and I have a feeling our oldest will be going to graduate school when the youngest is in his first year of undergraduate college.)

    Thank you!

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