How Is Your SAI (Previously Expected Family Contribution or EFC) Calculated?
Categories: Blog, For College Students, For Cosigners, For High School Students, For Parents and Cosigners, For Students
The Estimated Family Contribution (EFC) was a metric used in the Free Application for Federal Student Aid (FAFSA) process to help determine eligibility for financial student aid. Beginning in the 2024-2025 award year, the EFC was replaced with a metric called the Student Aid Index (SAI). As you review your financial aid award letter, you’ll now use the SAI to determine your financial aid options for the upcoming school year.
But what’s the difference between EFC and SAI, and how do these numbers impact your financial aid package?
Breaking things down to pieces and understanding how they all come together can help you navigate how to pay for college. This article will help explain how EFC (now known as the SAI) is calculated and how this metric is used in the FAFSA process.
What Was EFC and Why Was It Replaced?
The EFC was a metric previously used on the FAFSA to determine a family’s financial strength and eligibility for federal student aid. However, the EFC was replaced as part of a larger series of changes under the FAFSA Simplification Act intended to reduce confusion and build greater transparency into the financial aid application and award process.
FAFSA and schools now use the Student Aid Index (SAI) to help determine how much federal student aid you are eligible for.
What Is Student Aid Index (SAI)? How SAI Changed EFC
SAI stands for Student Aid Index. It is a metric that is used to estimate how much financial aid you might qualify for by evaluating your family’s income, assets, and other factors. The SAI functions similarly to the EFC in that it provides colleges with insight into your financial situation and needs. It also serves as a factor that determines your financial aid eligibility.
The SAI eliminates some confusion and makes minor changes to what can be used or excluded from the calculation. Using this more general term can help students and families look at their college financing options differently.
The SAI is calculated based on the income, assets, taxes, and demographics of the student and parents. The SAI can be negative, up to -1,500. A lower number does not necessarily increase financial aid, but it allows colleges to identify and group students with greater financial needs. While the SAI is not solely determinative, a higher SAI will typically lead to lower amounts of financial aid, and a lower SAI will often increase the amount of need-based aid.
How SAI Impacts Financial Aid
The SAI is a crucial factor in financial aid calculations to find the types of financial aid you can qualify for and the amount of aid you can receive. It operates on a straightforward principle—the lower the SAI, the greater the financial need and potential for receiving aid. Financial aid options that your SAI can impact include grants, scholarships, work-study programs, and federal student loans.
Though SAI does not directly determine the amount of money a family will need to contribute toward college costs, it’s an essential factor in the financial aid equation that shapes a student’s eligibility for federal aid. A higher SAI may indicate that the student’s family has a greater ability to contribute to the cost of education, which can impact the amount of need-based aid the student qualifies for.
Tip: You can estimate your aid package with the Federal Student Aid Estimator to ensure you receive the maximum aid possible.
How Is EFC (Now SAI) Determined?
Your SAI is determined based on your family’s taxed and untaxed income, assets, and other benefits such as unemployment or Social Security. SAI considers multiple aspects of a family’s financial situation, including income, assets, family size, and dependency status. Collectively, these elements paint a picture of a family’s financial health and serve as critical inputs in the calculation. Here’s a look at how each factor relates to your SAI.
Income
Your family’s income still plays an important role in calculating the SAI, just like it did with the EFC. The income calculation considers the student’s and parents’ taxable and non-taxable earnings. Non-taxable income can include various sources like untaxed portions of pensions, unemployment benefits, and child support received.
Both taxable and untaxed income are considered when determining your family’s ability to contribute toward college costs. Higher income typically results in a higher SAI, meaning you’ll likely receive less need-based aid. For many families, understanding what counts as income—such as rental income or non-taxable income—is key to planning ahead.
Assets
It’s important to note that income isn’t considered in isolation—in the FAFSA SAI calculation, assets are another crucial consideration. The net value of a family’s assets, including cash, savings, investments, and other properties (excluding the family home), is factored into the SAI. While assets are typically given less weight than income in the formula, they still reflect the family’s potential capacity to fund educational expenses over and above income.
This doesn’t mean every dollar of assets is treated the same. The calculation uses a specific formula to factor in assets, recognizing that families also need these assets for other critical living expenses. Assets are typically given less weight than income in the formula. However, SAI has made some changes to the exclusions:
- The Family Farm Exclusion that was a part of the EFC has been modified, although, in some circumstances, the net worth of the family farm can still be excluded as an asset.
- The Small Business Exclusion that was included with the EFC has been eliminated in the SAI.
Family Size
Family size also carries significant weight in the SAI calculation. The logic is straightforward—the more members in a family, the higher the potential education costs and living expenses. Larger families may often have a lower SAI, reflecting more financial need due to the broader financial responsibilities they shoulder.
However, the treatment of family size has seen a big shift with the transition to SAI. When determining EFC, the number of children in college at the same time would lower the expected contribution, often dividing the calculated amount among all students. With the SAI, this is no longer the case.
Now, the number of children in college a parent has at the same time will not affect the SAI. For families with multiple students in higher education, this change could mean a higher SAI and less financial aid per child. It’s important to budget accordingly and consider other funding options like scholarships and college loans to fill any gaps.
Dependency Status
Your dependency status—whether considered a dependent or independent student—remains a critical factor for SAI as it did for the EFC calculation. The rules for determining dependency remain the same, meaning most students under age 24 will be considered dependent unless they’re married or have dependents of their own.
You’re considered independent for financial aid purposes if you meet certain criteria, such as being 24 or older, married, a graduate student, a veteran, or if you have dependents of your own. Other situations, like being an orphan or having a court-appointed legal guardian, may also qualify you as independent.
Independent students typically have a lower SAI and more financial need, primarily because their parent’s financial information isn’t factored into the calculation.
SAI Calculation Methodology
Like with calculating EFC, the method for calculating the SAI is well-defined and controlled by governmental regulations. The SAI is designed to maintain a level of consistency to ensure all students are assessed equally and fairly, and it undergoes periodic reviews and updates by the federal government. The SAI formula you will need to use will vary depending on if you are:
- A dependent student.
- An independent student without dependents other than a spouse.
- An independent student with dependents other than a spouse.
Also, like the EFC, the SAI is merely an estimation. The actual contribution may vary, especially between institutions.
Interpreting and Using the Student Aid Report (SAR)
Students and families must complete the FAFSA every year to determine what federal student aid options they qualify for (federal loans, grants, scholarships, work-study, etc.). Once the Department of Education processes your FAFSA application, they provide you with a Student Aid Report (SAR), a comprehensive summary that includes your name, Social Security number, and other personal information.
It also includes your all-important SAI number, which serves as a benchmark for determining the need-based aid for which a student is eligible. Colleges use this figure to determine the gap between the cost of attendance (COA) and what a family can contribute. They’ll then provide a customized financial aid package, including grants, scholarships, work-study opportunities, and loans.
Look over your SAR carefully, and if you find mistakes, go back and fix them right away. The schools you listed will get your SAR automatically, so you don’t have to send it yourself. If they need anything else from you, they’ll reach out, so be sure to check your email and student portal.
Learn More with Ascent
As you and your family consider the next steps in your college journey, it’s important to understand how SAI is calculated, and how it influences the amount of federal aid you may qualify for.
Ascent is committed to providing students with the financial knowledge and confidence to make well-informed decisions for the future. From scholarships to college loans, we’re here to support your higher education goals every step of the way.
Check your rates today to learn more about how our cosigned and non-cosigned loans can help supplement your college expenses, or follow our blog for more student success tips and insights.
FAQ
What Is a Good EFC Number on FAFSA?
The Expected Family Contribution (EFC) has been replaced by the Student Aid Index (SAI) on the FAFSA. How the EFC is determined is similar to the SAI. However, unlike the EFC, a lower SAI is better if you’re hoping for more financial aid. For example, an SAI of 0 or lower often qualifies students for the maximum Pell Grant, while an SAI in the low thousands may still lead to need-based aid, depending on the school’s cost.
How Far Back Does FAFSA Look at Assets?
The FAFSA examines financial information from two years before the academic year for which you’re applying. So, if you’re applying for the 2025–26 school year, the FAFSA will assess income and assets from the 2023 tax year. This period is often referred to as the “prior-prior year.” The FAFSA considers wages, salaries, interest, dividends, business income, and certain government benefits. For assets, it looks at savings accounts, investments, real estate (not including your primary home), and the net worth of businesses or farms.