The schools need to see what federal financial aid the student qualifies for, so they can create an accurate FA package.
Obviously it can matter for some families…some who have lost the sibling benefit no longer qualify for a pell grant, for example. But for many families at FAFSA only schools that don’t meet full need (the vast majority), the lost sibling benefit may not impact their aid package at all. For some it might, see the various case studies that have been done.
I have no horse in this race, so am not advocating for either ‘side’. Nothing we can do to change the law as written, at least for this year.