The wait is over! Now you and your families can calculate a student's SAI.
The College Money Method Crunch
The Crunch provides news and information around financial aid and paying for college that you can use with students and families in your college counseling
practice.
December 2022 Edition
The Student Aid Index Calculator is here!
Families have been waiting calculate their SAI. The wait is over. The Department of Education announced that Student Aid Index (SAI) would be replacing Expected Family Contribution (EFC) nearly two years ago. On November 21st, Federal Student Aid finally published the formula. I used this formula to create an SAI calculator your families can use.
There are notable changes to the formula that will impact the Class of 2024 and beyond.
Number in
college. The most discussed - and maligned - change is that the formula no longer divides the EFC, or now SAI, by the number of students in college. The SAI will be calculated equally for each student, except for differences in student income or assets reported between siblings. IMPACT: Increase in SAI for families with multiple kids in college.
Limits to income reported. Income reported on the FAFSA will only come from the
federal tax return. Parents (or students) will no longer be required to report untaxed or pre-tax income not capture on the tax return. Most notably, pre-tax contributions to employer retirement plans will not be counted. Parents who want to reduce their income for the prior-prior year may now max out their employer retirement contributions to reduce their FAFSA income. For student income, there is no longer the requirement to report money received or bills paid on their behalf by relatives or
others. IMPACT: Decrease in SAI if a family has sources of untaxed income.
"Automatic" $0 SAI. There are new thresholds for students to qualify for an SAI equal to $0 and the maximum Pell Grant. A parent's Adjusted Gross Income (AGI) in the prior-prior year will be compared to a multiple of the Federal Poverty Level income for their martial status, family size and state of residence. If their AGI falls below this amount, then a
student will be given a max SAI equal to $0 and the full Pell Grant. IMPACT: Decrease in SAI to $0 for many families, as this methodology is more generous and flexible than the "automatic $0 EFC" income threshold of $29,000 or less.
SAI can be below $0. SAI can also go down to -$1,500 as a measurement of extreme need. Any student who's parent is not required to file a tax return will be assigned an SAI equal to -$1,500, but
there are other scenarios where a student's SAI will be less than $0. IMPACT: Decrease in SAI for certain qualifying families.
Child support now an asset. The amount of child support received in the prior-prior year will now be reported as a parent asset. IMPACT: Decrease in SAI for parents receiving child support since the contribution rate from parent assets is much lower than from parent
income.
Family business or farm value. The net worth of a family business or farm of any size will now be reported as a parent asset. The current EFC formula excludes this amount if the business or farm employs fewer than 100 full-time employees, which exempted most cases. Going forward, this change may impact more small business owners. IMPACT: Increase in SAI for parents who own a business owners or farm.
☕️January Counselor Coffee Breaks☕️
If you'd like to join the conversation with other
counselors about the Student Aid Index and how this change will affect for your junior class, I'll be hosting a round of Counselor Coffee Breaks this January on this topic.
