College just got much pricier for American families

College tuitions are insanely high. They’re so high, in fact, that almost nobody pays sticker price. Only 1/4 of students at private universities pay full tuition. And even at public universities, most students get financial aid. That’s why it’s disturbing that the federal government’s brand new financial aid formula explicitly and intentionally shortchanges families with more than one child in college. It’s a direct attack on families, and it’s Congress’s fault. The central figure in the world of financial aid is Uncle Sam. The U.S. Department of Education publishes the FAFSA form, the Free Application for Federal Student Aid, and sets a formula that calculates a family’s ability to pay, and thus their financial need. This formula determines federal aid, such as Pell grants and subsidized student loans. Many private colleges also rely on this formula in doling out their own aid. For dependent students, college kids whose parents can help them pay for college, FAFSA asks for the parents’ assets, basically their savings and checking accounts, and their income. Looking at a family’s income and cash, the education department calculates a family’s ability to pay tuition.

According to the federal formula, a family earning $100,000 and sitting on $25,000 in savings can afford about $32,000 a year in tuition. What if their family has multiple kids in college? For years, the federal government did the sensible thing. They divided the $32,000 by the number of kids in college. But Congress just changed that. As of 2024, a family deemed capable of affording $32,000 in college tuition is now expected to pay $32,000 per student in college. That is, the Education Department expects them to pay double what the Education Department says they can afford to pay. How did this happen?

Back in 2019, Senators Lamar Alexander and Patty Murray wrote a bill to simplify the FAFSA form and tweak its formula. In 2020, as part of a massive spending bill, Congress passed the FAFSA reform, and Donald Trump signed it into law. The Education Department implemented the new system, effective January 1, 2024. And now the “sibling discount” is gone. But it was never a sibling discount. It was always just a sibling count. The logic of the new law is that only one child per family gets financial aid. And if you were dumb enough to have two kids within four years, well, that’s your problem. It makes no sense unless the policy of the federal government is that nobody should have more than one child, or that only the oldest should go to college, or maybe that all children should be spaced four years apart. Congress can, of course, repeal this one child policy in the FAFSA formula. The question is whether Congress can be made to care.