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Jackpot = Having 2 Kids in College

Brad Bobb CFP® | September 6, 2017

Having two kids in college at the same time is a financial burden that many parents are terrified of, and understandably so. The average college cost today is $24,610 for a public university and $49,320 for a private school. If you multiply that by two, you could be looking at a college bill of nearly $50,000 a year for a public university! Talk about a big number!!

The thought of having two, or even three kids in college at the same time sounds daunting, but there is good news. A family's Expected Family Contribution (EFC) is a per household number and not a per student number. You can find your EFC by going here and putting your family's financial information in. Expected Family Contribution is based on household income and assets and is the minimum amount that a household is expected to contribute toward the cost of college.

I say minimum amount because you could pay more than your EFC depending on what school your child attends. The difference in your EFC and the cost of the school is called your financial need. Most schools will cover part of your financial need and then you have to pay the difference, however, many schools will pay up to 100% of a student's financial need. This list shows colleges that claim to have met 100% of financial need for the 2015-16 school year.

Why should I feel lucky to have multiple kids in school at once?

A family's EFC is a per household number, not per student. In other words, if you could find a school that covers 100% of financial need, you could put three kids through a year of school for the same cost as one.

Wow! You may want to read the above statement again.

Two kids in school at the same time is a pretty common scenario for families with multiple kids. Assuming all three of my kids go to college for four years, I will have two kids in college for at least three years. If they are like their dad and decide to change majors three years in, it could be more!

The college search is vital

As mentioned above, the percentage of financial need that a school covers becomes an even bigger deal when you have more than one child in college. Let’s look at an example.

  • Two kids in college
  • One school costs $25,000
  • Second school costs $35,000
  • EFC = $15,000
  • Financial need = School costs ($25k + $35k) - EFC ($15k) = $45,000

The percentage of financial need covered should be one of the top criteria in your college search. Here is what the out of pocket cost would be if both schools cover 50% of financial need versus 90% of financial need.

Choosing schools that cover 90 percent of financial need versus 50% would save this family $17,500 each year that their two students are in school.

Even though having multiple kids in college sounds intimidating, it can be a blessing if you are smart about your college search. Again, the percentage of financial need covered should be a top criterion in your college search if you want to save money on the cost of college. If you would like help with your college search and putting together a four year funding plan you can contact me here.

Brad Bobb, CFP® is the owner of Bobb Financial Inc, and an expert in retirement planning for federal employees.