What Is a High SAI Number and What Does It Mean?

The Free Application for Federal Student Aid (FAFSA) is essential for students seeking financial assistance for higher education. For the 2024-2025 academic year, the Student Aid Index (SAI) replaced the Expected Family Contribution (EFC). The SAI is a numerical value colleges use to assess a student’s eligibility for federal student aid.

Understanding the Student Aid Index (SAI)

The Student Aid Index (SAI) is an index number financial aid administrators use to determine federal student aid eligibility. It replaced the Expected Family Contribution (EFC) as part of the FAFSA Simplification Act. This change aims to simplify the financial aid process and provide a more accurate reflection of a family’s financial strength.

The SAI is not the amount a family will pay for college, nor the specific federal aid a student will receive. Instead, it guides colleges in estimating a student’s financial need. A lower SAI indicates greater financial need, increasing the likelihood of qualifying for need-based aid. Conversely, a higher SAI suggests lower demonstrated financial need. The SAI can range from -1,500 to 999,999, with negative values identifying students with the most significant financial need.

How the SAI is Calculated

The Student Aid Index calculation uses a standardized formula applied to financial information provided on the FAFSA. This calculation considers several components to determine a student’s ability to contribute towards educational costs. Much of the tax information required is directly transferred from the Internal Revenue Service (IRS) into the FAFSA form, provided the applicant grants consent.

Key elements in the SAI calculation include the student’s income, primarily their Adjusted Gross Income (AGI), and any untaxed income. For dependent students, parental income, including their AGI and untaxed income, is also a factor. Notably, starting with the 2024-2025 FAFSA, child support received is treated as an asset rather than untaxed income.

Assets held by both the student and, for dependent students, the parents also contribute to the SAI. These include cash, savings, checking accounts, and investments. Non-retirement assets, such as brokerage accounts and the net worth of businesses or farms, are considered. However, primary residences and qualified retirement accounts like 401(k)s and traditional IRAs are excluded. For the 2024-2025 FAFSA, the asset protection allowance has been reduced to zero.

The calculation also incorporates family details, such as household size, which is a factor in the SAI formula. A larger household size indicates less available income per person for college expenses. An income protection allowance shelters a certain amount of income. While the number of students in college was previously a factor in the EFC, the SAI no longer divides the parent contribution by the number of children enrolled in college simultaneously.

What a High SAI Number Means

A high Student Aid Index (SAI) indicates a lower demonstrated financial need from the perspective of federal student aid programs. This means the student and their family have a greater capacity to contribute toward college costs. Consequently, students with a high SAI will qualify for less, or no, need-based federal financial aid.

Need-based aid includes programs such as Pell Grants, Federal Supplemental Educational Opportunity Grants (FSEOG), and Direct Subsidized Loans. These forms of aid are designed for students who demonstrate significant financial need. A high SAI reduces the calculated financial need, limiting eligibility for these programs.

A high SAI does not mean a student is ineligible for all federal financial aid. Students with a higher SAI may still be eligible for non-need-based aid. This can include Unsubsidized Direct Loans or PLUS Loans, which are available regardless of a student’s or family’s demonstrated financial need.

Colleges determine a student’s financial need by subtracting the Student Aid Index from the institution’s Cost of Attendance (COA). The formula is: Cost of Attendance (COA) – Student Aid Index (SAI) = Financial Need. The COA encompasses various expenses, including tuition, fees, housing, food, books, supplies, and transportation. A higher SAI directly results in a lower, or even zero, calculated financial need, influencing the types and amounts of aid a student may receive.

Factors Contributing to a High SAI

A high Adjusted Gross Income (AGI) for the student or their parents is a primary factor leading to a higher SAI. Significant income from employment, self-employment, or investments increases the household’s financial strength. The FAFSA considers income from the “prior-prior year,” meaning the tax information from two years before the academic year for which aid is sought.

Another contributing factor is the presence of significant non-retirement assets. Large amounts held in savings and checking accounts, brokerage accounts, or other non-retirement investments, such as investment real estate, increase the SAI. While retirement accounts and the family’s primary residence are excluded, other liquid assets are assessed. Starting with the 2024-2025 FAFSA, the net worth of small businesses and family farms is also included as an asset, which can elevate the SAI for those who own such entities.

A smaller household size can also lead to a higher SAI. Fewer dependents in the household mean that the available income and assets are spread among fewer individuals, increasing the per-person contribution capacity.

Additionally, the new SAI methodology no longer provides a benefit for having multiple students enrolled in college concurrently. This “multiple-student discount” has been eliminated, which can result in a significantly higher SAI for families with more than one child in college compared to prior years. This change can particularly impact middle and high-income households.