Update: I just found this document: “PROFESSIONAL JUDGMENT, TOPIC: Siblings’ College Costs”
While this does discuss the standard treatment under the IM (“If two are enrolled, the parent is expected to contribute 60 percent of the calculated contribution to each child; if three are enrolled, 45 percent; if four or more are enrolled, 35 percent”) it indicates that there may be a basis for professional judgement in some cases:
“WHY PROFESSIONAL JUDGMENT MIGHT BE APPROPRIATE
The standard IM treatment does not take into account the cost of attendance and/or financial aid for each of the enrolled siblings. The actual parent contribution for a sibling might be lower if that child is attending a low-cost institution and/or is receiving significant aid.”
The example they provide is for a lower than expected PC for a sibling, but presumably this could apply to a higher than expected PC too.
So, contrary to my previous statement, it looks like could be the basis for an appeal.
Some schools may be accounting for this already though rather than using the standard deduction. As the document states: “An institution using software that utilizes the College Board’s IM may establish a global option to allocate the parent contribution based on the type of institution attended by each child and the relative cost of that institution.”
This document has the same info, but provides two examples of professional judgements for cases where a sibling was enrolled in community college (which is not usually eligible for a sibling reduction):