It would really depend on whether you will qualify for need based aid once the first $80k is spent. You may not if your income is high enough or if you have other assets. It will depend on the school and what its FA policy is. If it is an OOS public school, there might not be any need based aid from the school at all, even if your FAFSA EFC is zero (although you would get Pell and probably work study and SEOG). If its a generous school, once that $80k is spent and you have two in school, you might get more. $40k per year more? Unlikely. The $80k in #1 son’s 529 is raising your FAFSA EFC by about $4500 (if you exceed the protected amount for your age). Your income is probably doing a lot more damage to the number than the assets.
You can estimate whether the school will give you more by running the NPC with both ways, with one in college and $80k x 2 in assets (plus whatever else you have in assets), and then run it with 2 in school, $80k in 529 (as it will be if you spend the $80k in #1’s 529 and when #2 is also in school). Is the school giving extra? If not, it probably doesn’t matter how you use the 529 plans. You can run an NPC for your younger child too (you’ll have to guess on the school), with one in school and nothing in 529 plans to see if he’d get any significant need money for his final two years if you used up all the 529 plans in his first two years.