Student Aid Index

The federal government is changing how they calculate a family’s ability to pay for college. The Expected Family Contribution (EFC) will be replaced with the Student Aid Index (SAI). SAI won’t erase the high price tag of tuition, but it will help students and families make the best decision about their finances and education. The Expected Family Contribution, or EFC, is a number that colleges use to determine how much financial aid you will be offered. The EFC is calculated using a set formula based on the information you provide in your Free Application for Federal Student Aid or FAFSA. The EFC includes both the student’s and parent’s income and assets. The EFC is also used to calculate the parental contribution to a student’s cost of attendance. The EFC is a significant factor in determining eligibility for need-based financial aid, including grants, scholarships, and federal loans.

With the passing of the Fostering Undergraduate Talent by Simplifying Student Aid Act of 2021, the EFC is being replaced with a new index called the Student Aid Index, or SAI. This new name is designed to clarify that the index does not represent the amount you will be expected to pay for college and is only a measure of your family’s ability to assist with paying for your student’s higher education.

How to Calculate Student Aid Index?

The EFC is based on the information you provide in your FAFSA, such as your family size, income, and assets. The EFC is then calculated using a set formula. However, starting with the 2024-25 academic year, the EFC will be replaced by something called the Student Aid Index, or SAI. While this name change is inconvenient, it’s important to understand that the SAI will serve the same function as the EFC.

The SAI will be determined using the same formula as the EFC, but it will take into account additional information, including the value of 529 and college savings accounts held by students. Additionally, the SAI will allow schools to make case-by-case adjustments to help students with exceptional circumstances, such as a dramatic change in income. This is a much more holistic approach to determining needs and will ultimately help more families afford the cost of college.

In Summary, the lower the Student Aid Index, the more need-based financial aid a student may qualify for. This need-based financial aid can come in the form of grants, which do not have to be repaid, or subsidized loans paid by the government while the student is in school.

While the Student Aid Index will be a key part of the college selection and financial aid decision-making process, it is important to remember that it does not necessarily reflect what your family will actually pay for college. Each school will ultimately decide how much financial aid to award you, and that amount may be more or less than your Student Aid Index indicates.