You do not need to complete a FAFSA for your other student. The EFC you got per FAFSA is for that one student…and you indicated there will be two college.
If you want to apply for need based financial aid for kid 1, then yes…you need to complete a FAFSA for that student. And that FAFSA info will be used by that college to determine if you qualify for need based aid there.
Just remember…that first older kid is going to graduate. AND the FAFSA rules are changing as of the 2023-24 academic year and having two in college will no longer split the EFC.
Also, your FAFSA EFC needs to be viewed as the minimum the colleges will expect you to pay as most colleges that use the FAFSA only do not guarantee to meet full need for all anyway (University of Chicago is the exception).
Have you run the Net Price Calculators for student number 2 colleges? Those will give you a better estimate of your net costs than the FAFSA EFC. If you are divorced, own a business or are self employed, own real estate other than your primary residence …these NPC won’t be as accurate.