The "American Family FAFSA Opportunity Act of 2025" amends the Higher Education Act of 1965 to change how a family's ability to pay for college is calculated for federal financial aid by dividing the family's assessed contribution by the number of family members in college.
Christopher "Chris" Smith
Representative
NJ-4
The American Family FAFSA Opportunity Act of 2025 amends the Higher Education Act of 1965 to change how a family's ability to pay for college is calculated for federal financial aid, specifically by dividing the family's contribution by the number of enrolled students. This change aims to remove the "sibling penalty" in financial aid calculations, ensuring families with multiple children in college receive a more accurate assessment. These changes will take effect starting with the 2025-2026 award year.
FAFSA Fix Proposed: Bill Would Divide Family Contribution by Number of Siblings in College Starting 2025-26
This bill, titled the "American Family FAFSA Opportunity Act of 2025," proposes a significant tweak to how federal student aid eligibility is calculated under the Higher Education Act of 1965. The core idea is to adjust the formula for families sending more than one child to college at the same time. Specifically, it mandates dividing a family's assessed contribution towards college costs by the number of eligible children enrolled at least half-time in a degree or certificate program.
Sharing the Load: A New Math for College Aid
Here's the breakdown: Currently, the federal methodology for determining financial aid (often referred to as the Expected Family Contribution or EFC, now transitioning to the Student Aid Index or SAI) calculates what a family is expected to pay. Section 2 of this bill introduces a change often called the "sibling discount" or similar variations. It directs that the calculated family contribution figure be divided equally among the number of dependent children (excluding parents) attending college simultaneously. For instance, if a family's calculated contribution is $15,000 and they have two children in college, under this bill, the contribution factored into each child's aid package would be $7,500 ($15,000 / 2). The bill also clarifies that the resulting per-student contribution amount cannot be less than zero. This aims to lower the expected financial burden per student for these families, potentially increasing their eligibility for federal grants and other need-based aid.
Timing the Change
When would this potential shift happen? According to Section 3, these changes are set to become effective on the date the bill is enacted. However, the practical application for students and families filing the FAFSA (Free Application for Federal Student Aid) would begin with the 2025-2026 award year and apply to all subsequent academic years. This means families planning for college enrollment during that timeframe would see this new calculation method applied if the bill becomes law.