Expected Family Contribution vs. Student Aid Index (SAI)

Understanding how colleges assess a family’s financial capacity for higher education is a fundamental step in navigating the financial aid process. This assessment, historically known as the Expected Family Contribution (EFC), has been updated and is now referred to as the Student Aid Index (SAI). The SAI serves as a standardized index number, not a direct bill, that colleges and universities utilize to gauge a family’s financial strength.

The Student Aid Index provides a consistent metric for determining a student’s eligibility for various types of financial assistance. Its role in the financial aid equation remains central. This index is a key component in unlocking federal, state, and institutional aid opportunities, helping to bridge the gap between college costs and a family’s demonstrated ability to pay.

How Student Aid Index is Determined

The Student Aid Index (SAI) is calculated using a review of a family’s financial information, with data gathered primarily through the Free Application for Federal Student Aid (FAFSA). The calculation considers income and assets from both parents and students.

Parental income is a significant element in the SAI calculation, derived from the “prior-prior” year’s tax information. For the 2024-2025 academic year, 2022 tax data is used. The calculation begins with the adjusted gross income (AGI) from tax returns and may include certain untaxed income sources, such as tax-exempt interest or untaxed portions of retirement distributions. From this, allowances like the Income Protection Allowance (IPA) are subtracted, which account for basic living expenses and vary based on family size.

Student income is also factored into the SAI, assessed at a higher rate than parental income. Earnings from student employment or other sources are considered, with a portion protected by an allowance. Any income above this allowance is then included in the calculation.

Beyond income, both parental and student assets are considered. Parental assets can include cash, savings accounts, and investment accounts. For the 2024-2025 aid year, assets from small businesses and family farms are now included. A percentage of these assets, such as 12% for parental assets, is assessed as available for college costs.

Student-owned assets, such as savings accounts or certain custodial accounts, are assessed at a higher rate than parental assets. However, certain assets, like the equity in a family’s primary residence and qualified retirement accounts (e.g., 401(k)s and IRAs), are excluded from the calculation under the Federal Methodology.

Two methodologies guide the SAI calculation: the Federal Methodology (FM) and the Institutional Methodology (IM). The Federal Methodology is used by all institutions participating in federal student aid programs and is based on the information provided on the FAFSA. This method focuses on income and liquid assets, with specific allowances and exclusions mandated by federal law.

Many private colleges and universities utilize the Institutional Methodology in addition to the Federal Methodology. This method, often facilitated by the CSS Profile, allows colleges to consider factors not included in the Federal Methodology, such as home equity, the value of certain business assets, and the income and assets of non-custodial parents. The specific rules for IM can vary significantly from one institution to another, leading to different aid outcomes.

How Student Aid Index Impacts Financial Aid

The Student Aid Index (SAI) determines a student’s financial aid eligibility using a core formula: Cost of Attendance (COA) minus Student Aid Index (SAI) equals Financial Need. This formula provides a standardized way for financial aid offices to assess how much need-based assistance a student may qualify for. A lower SAI indicates a greater financial need, potentially leading to more need-based aid.

The Cost of Attendance (COA) represents the total estimated cost for a student to attend a particular institution for an academic year. This figure includes both direct and indirect educational expenses. Direct costs encompass tuition and fees, along with room and board if living on campus.

Indirect costs within the COA include allowances for:
Books, course materials, and supplies
Transportation expenses
Miscellaneous personal expenses
Loan fees
Childcare
Disability-related expenses or costs associated with obtaining a professional license

The “Financial Need” derived from the COA minus SAI calculation represents the maximum amount of need-based financial aid a student is eligible to receive. Colleges strive to meet this need through various aid programs. These programs include:
Federal grants, such as the Pell Grant, which does not need to be repaid
Subsidized federal student loans, where the government pays interest while the student is in school and during grace periods
Federal Work-Study programs, allowing students to earn money through part-time employment
Institutional grants and scholarships from the college itself

Need-based aid is directly influenced by the SAI. Merit-based aid is awarded based on academic achievements, talents, or other criteria, regardless of financial need.

Finding Your Calculated Student Aid Index

After submitting the Free Application for Federal Student Aid (FAFSA), families receive a document called the FAFSA Submission Summary. This summary is the primary document where the calculated Student Aid Index (SAI) is reported. It confirms the information provided on the FAFSA and outlines the results of the federal aid eligibility calculation.

The FAFSA Submission Summary is available through the student’s account on the Federal Student Aid website, studentaid.gov. Students who provided an email address on their FAFSA receive an email notification when their summary is ready for review.

For students who also completed the CSS Profile for institutional aid from private colleges, the process for receiving the calculated SAI differs. Colleges that use the CSS Profile receive this information directly. While some institutions may disclose this institutional SAI as part of their financial aid offer, it is not centrally reported like the federal SAI. Families should consult directly with the financial aid offices of colleges requiring the CSS Profile to understand how their institutional assessment is communicated.