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What is the Student Aid Index (SAI) on the FAFSA?

a sticky note that says SAI on it

If you’re preparing for college and the financial aid application process, you’ll need to know about the new Student Aid Index (SAI). It’s part of this year's new Free Application for Federal Student Aid (FAFSA) and will be critical in determining how much financial aid you’ll receive. 

In this piece, we’ll explain the SAI, how it replaces the Expected Family Contribution (EFC), and how this change could impact the financial aid you qualify for. So, let's dive in and unpack everything you need to know about the SAI. 

The EFC is now the SAI

With the new FAFSA comes an updated way to calculate your ability to pay for college. What used to be the EFC is now the SAI. 

This change will be helpful because the "Expected Family Contribution" was often misunderstood as the total amount a student would be expected to pay for college. By renaming this metric the Student Aid Index, the focus shifts to its purpose as an eligibility index rather than a payment determination.

Understanding the SAI

As mentioned above, the SAI serves as an eligibility index for student aid, helping colleges and scholarship providers assess your financial need. SAI is calculated based on a student's and parent's income, assets, tax information, and other demographic details. 

A higher SAI indicates a lower need for financial assistance, so you'll likely qualify for less financial aid.

A lower SAI indicates a higher need for financial assistance, so you'll likely qualify for more financial aid.

The minimum SAI is -1500, meaning students with the minimum SAI may qualify for maximum Pell Grants.

It is important to note that the SAI alone does not determine the total amount you will receive in financial aid. Other factors, like the Cost of Attendance (COA) and any additional aid you qualify for, are considered to assess your financial need. 

So, it's vital to ensure that you provide accurate and up-to-date information on the FAFSA to ensure your SAI is calculated accurately.

How the SAI formula is different

The SAI will be calculated differently than the EFC, but it serves the same purpose: determining your financial need. These changes in the formula calculation streamline the process and provide a more accurate assessment of your ability to pay for college. 

Let’s explore some of these changes in the new SAI formula now.

1. Number of Dependents in College No Longer Considered

Under the previous EFC calculation, the number of family members enrolled in college impacted the parent contribution portion of the EFC. However, the SAI no longer considers this factor, eliminating the advantage previously given to families with multiple students in college. 

2. The SAI Can be a Negative Number

Unlike the EFC, which did not calculate amounts less than zero, the SAI allows negative values as low as -$1,500. This adjustment enables colleges to identify students with greater financial need, directing aid to those who require it the most.

3. State and Local Taxes No Longer Considered

The SAI calculation no longer includes an allowance for state and local taxes. This change simplifies the formula and focuses on the applicant's income and assets without considering tax deductions or exemptions.

4. The Income Protection Allowance (IPA) Will Increase

The simplified FAFSA increases the Income Protection Allowance (IPA), which shelters a certain amount of parental income. However, the SAI no longer increases the IPA for additional family members enrolled in college simultaneously.

The Student Aid Report (SAR)

Once you submit your FAFSA, you will receive a Student Aid Report (SAR) that includes your official SAI value. The SAR is sent to you, the colleges listed on your FAFSA, federal and state assistance programs, and other scholarship sources. 

Each college will use the SAR to prepare a financial aid package tailored to your needs, including grants, loans, and work-study opportunities. From there, you’ll receive a financial aid award letter for each school you’ve been admitted into. 

Appealing for additional financial aid

If transitioning from EFC to SAI decreases your financial aid, you can appeal for more assistance. While changes in the financial aid formula alone may not be grounds for a successful appeal, certain special circumstances can qualify you for additional aid. 

These circumstances may include unusual business or investment losses, real estate losses, or severe disability of the student, parent, or spouse. It's essential to communicate your situation to the college's financial aid office and provide any necessary documentation to support your appeal.

Final thoughts on the SAI

The transition from EFC to SAI brings clarity and a more accurate assessment of financial needs for students applying for college. Understanding the SAI calculation, its impact on eligibility for financial assistance, and the appeals process is essential for making informed decisions about your future education. 

However, it’s essential to remember that you should complete the FAFSA, even if you don’t think you’ll be eligible for financial aid. We talked to Marie D. Johnson, Director of Student Financial Services at the University of Vermont. She told us that the biggest mistake students make is not filling out the FAFSA. Maria explained, 

"There is a lot of misinformation about financial aid eligibility, and some students and families automatically assume they won't qualify for it. So they either don't complete the FAFSA or delay in doing so. While well-intentioned, advice from friends and family can be misleading and incomplete. It is always advisable to complete the FAFSA to understand your eligibility and to access student/parent loans if needed."      

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