For the 2024–2025 award year, the Student Aid Index (SAI) replaced the Expected Family Contribution (EFC) as the number colleges use to measure a family’s financial strength when awarding need-based aid. If you are comparing the Student Aid Index vs. the Expected Family Contribution, the short version is this: both come from the FAFSA, both plug into the same cost-minus-index equation, and both determine how much federal, state, and institutional aid you can receive. What changed is how the number is calculated, and those changes help some families and hurt others.
Why the Name Changed
The EFC had a branding problem. Families regularly mistook it for the actual bill they would owe, when it was really just an index. Renaming it the Student Aid Index was part of the FAFSA Simplification Act’s push to make the aid process less confusing and more equitable. The label is more honest: the number is an index colleges use to award aid, not a promise of what you will pay.
The Three Structural Changes That Move Your Number
Beyond the name, three formula changes matter most.
The SAI can go negative. The EFC bottomed out at zero. The SAI can drop as low as negative $1,500, which helps colleges identify and prioritize students with the deepest financial need. For Pell Grant calculations, a negative SAI is treated as zero, so the student receives the maximum grant.1Federal Student Aid. Use of Negative Student Aid Index (SAI) in Federal Supplemental Educational Opportunity Grant (FSEOG) Selection Criteria
Siblings in college no longer reduce the number. Under the old formula, having multiple children enrolled at the same time lowered each child’s EFC. That factor has been eliminated. Families with overlapping college years will generally see a higher SAI than they would have seen as an EFC.2NASFAA. Removal of Number in College Yields More Equitable, Simple Application Process
Tax data transfers directly from the IRS. The old FAFSA let you pull in tax data through a retrieval tool. Under the FUTURE Act, the IRS now sends tax information directly to the Department of Education, reducing manual entry and the errors that came with it.3Internal Revenue Service. Tax Information for Federal Student Aid Applications
What Counts as Income Now
The biggest driver of your SAI is still Adjusted Gross Income, now transferred directly from the IRS rather than self-reported.3Internal Revenue Service. Tax Information for Federal Student Aid Applications The formula still picks up certain untaxed amounts that appear on a return, such as tax-exempt interest and untaxed IRA or pension distributions (excluding rollovers).
Several items the EFC counted have been dropped from the income side. Child support received, payments into tax-deferred retirement plans, military and clergy housing allowances, veterans’ noneducation benefits, and other previously counted untaxed income no longer appear as income under the SAI. Child support is now reported as an asset of the recipient parent rather than as income, which generally produces a smaller impact because assets are assessed at a lower rate than income.4Federal Student Aid. 2024-25 Draft SAI Guide Supplement – EFC to SAI Crosswalk
What Counts as an Asset Now
The formula still considers net worth of savings, checking, and investments for both parent and student. Your primary home is not counted.5Federal Student Aid. Current Net Worth of Investments, Including Real Estate Assessment rates carry over from the old system: parent assets convert at 12% of discretionary net worth, student assets at 20%.6Federal Student Aid. 2025-2026 Federal Student Aid Handbook – Student Aid Index (SAI) and Pell Grant Eligibility Ten thousand dollars in a student-owned account adds $2,000 to the calculation; the same amount above the parent’s protection allowance adds $1,200.
Small business and family farm treatment has been a moving target. For the 2024–2025 and 2025–2026 award years, the old exemption for businesses with 100 or fewer employees was eliminated, forcing all families to report business net worth regardless of size. For 2026–2027, the exclusion is back: businesses with 100 or fewer full-time employees are excluded again, along with family farms where the family lives on the property.7Federal Student Aid. Net Worth of Business/Farm
529 Plans Under the SAI
How a 529 plan affects your SAI depends on who owns the account, not who the beneficiary is. A parent-owned 529 designated for the student filing the FAFSA is a parent asset. A student-owned 529 (common when the account originated as a custodial UGMA or UTMA) is a student asset, assessed at the higher 20% rate. Parent-owned 529s for the student’s siblings are excluded.5Federal Student Aid. Current Net Worth of Investments, Including Real Estate
Plans owned by grandparents or other relatives outside the household are not reported on the FAFSA at all, and qualified distributions from those accounts no longer count as student income. That makes grandparent-owned 529s one of the most aid-friendly ways to save.
How the SAI Turns Into Aid
Once you have an SAI, the equation colleges use is unchanged from the EFC era: Cost of Attendance minus SAI equals Financial Need.8Federal Student Aid. How Financial Aid Is Calculated Cost of Attendance covers tuition and fees, books and supplies, room and board (or a living allowance for students at home), transportation, and personal expenses. Each school sets its own COA, so the same SAI produces different financial need at different institutions.
Where the SAI does its most visible work is Pell Grant eligibility. For the 2026–2027 award year, the maximum Pell Grant is $7,395 and the minimum is $740.9Federal Student Aid Knowledge Center. 2026-27 Federal Pell Grant Maximum and Minimum Award Amounts The basic math: subtract your SAI from the maximum award and round to the nearest $5. A student with an SAI of zero or below receives the full $7,395. A student with an SAI of $3,000 receives roughly $4,395. Any SAI at or above $14,790 makes you ineligible for a Pell Grant.
If your calculated Pell amount falls below $740, you do not automatically lose eligibility. You may still qualify for the $740 minimum based on your tax filing status, family size, income relative to federal poverty guidelines, and state of residence.9Federal Student Aid Knowledge Center. 2026-27 Federal Pell Grant Maximum and Minimum Award Amounts
Colleges then use your remaining financial need to build a package that may include institutional grants, work-study, and federal student loans. A lower SAI opens the door to more grant aid; a higher SAI shifts the package toward loans.
Appealing an SAI That Does Not Match Your Situation
Because the SAI runs on prior-year tax data, and because the new formula ignores factors the old one considered (siblings in college being the clearest example), your number may not reflect your family’s real capacity to pay. You can ask your school’s financial aid office to adjust the data inputs used in the calculation or your cost of attendance. This is called professional judgment.
Federal law gives aid administrators discretion for circumstances like these:10Federal Student Aid. Special Cases – 2025-2026 Federal Student Aid Handbook
- A parent laid off after the tax year used on the FAFSA.
- Large out-of-pocket medical or dental expenses.
- A change in housing status, including homelessness.
- Child or dependent care costs that exceed the formula’s standard allowances.
- Private elementary or secondary school tuition for younger siblings.
- Additional family members in college, which the SAI formula no longer accounts for on its own.
Schools cannot deny all professional judgment requests as a blanket policy, and each decision must be documented. They also cannot change the formula itself, only the data inputs. Routine expenses like utilities, credit card payments, and vacations do not qualify. The point is to show that your situation is genuinely different from what the FAFSA data reflects.