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Student Aid Index: All You Need To Know About The Changes In Financial Aid

Student Aid Index

The Student Aid Index (SAI) will replace the existing Expected Family Contribution (EFC) starting from July 2023.

Now, what exactly is this term – Student Aid Index? The Student Aid Index (SAI) is not a new scheme or policy. It is essentially a rebranding of the presently used term – Expected Family Contribution or EFC. 

Right now, you (as a student) can receive your expected family contribution (EFC) after submitting the Free Application for Federal Student Aid (FAFSA). This EFC is provided to you in the Student Aid Report. EFC is a number that colleges use to determine how much financial aid you can receive if you enrol.

However, the term – EFC – is frequently misunderstood for obvious reasons. It’s not, as the name suggests — the amount your family is expected to pay towards your education. As a matter of fact, most families end up paying a lot more than the EFC amount after taking loans to fill gaps in financial aid. Many people even believe that the EFC tells you what you will have to pay or how much aid you will receive. That’s not the case at all. 

The renaming of the EFC to Student Aid Index is meant to clear up this confusion about what EFC actually is: A number that colleges use to determine how much financial aid to give you.

To simplify the system and make the financial aid process more interpretable, the government included various elements of the FAFSA Simplification Act in its 2021 Consolidated Appropriations Act. This was signed into law in December 2020. Part of this change includes replacing the EFC with the Student Aid Index (SAI). The renaming of EFC to Student Aid Index, or SAI, will be effective starting July 1, 2023, for the 2023-2024 academic year and beyond. 

Now let’s understand what the Student Aid Index is and what are the new changes introduced with its implementation. 

What Is The Student Aid Index?

The Student Aid Index will be used by financial aid administrators while calculating financial aid awards. It helps determine how much you will receive in most forms of financial aid (excluding Pell Grants, as it has its own calculation) including federal student loans and work-study programs.

How Is The Student Aid Index Calculated?


The information you input while filling out the Free Application for Federal Student Aid, or FAFSA, about you and your family’s financial profile, will determine your SAI. The index will equal the sum of your parents’ available income, your income and assets.

After completing the FAFSA, you will receive your student aid report, which will include the Student Aid Index. 

To know in-depth about your SAR and the terms listed in it, do read: What Is The Student Aid Report?

What Are The Key Differences Between EFC And SAI?

The switch from EFC to SAI is all about clarifying the index’s purpose. Here’s how the SAI works and how it differs from the EFC.

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How The Expected Family Contribution Worked

At present, you are given an EFC after submitting your FAFSA. The EFC is calculated using a formula based on your family’s income, assets and any other benefits you receive.

To calculate your financial need, your college will subtract the EFC from their cost of attendance to come up with a number for how much you personally need to pay for school.

For example, suppose the cost of attendance at your selected college is $25,000, and you have an EFC of $5,000. Your EFC will be subtracted from the cost of attendance, resulting in $20,000 as a financial need. This number is how much need-based aid you’re eligible to receive. Schools may have their own scholarship and grant programs but you also have the options of federal need-based grants here. 

After need-based aid, schools also determine how much aid (apart from need-based) you can get such as other student loans. To calculate this additional aid, colleges subtract your current financial aid awards from the cost of attendance. The resulting number is how much you can take out in direct unsubsidized loans and direct PLUS loans.

Read More: Parent Loan for Undergraduate Students (PLUS): A Complete Guide

For example, imagine you were eligible for up to $10,000 in need-based aid. Subtract that number from the cost of attendance—$20,000—and the remaining $10,000 is what you can typically borrow in federal student loans.

How The Student Aid Index  Will Work

The SAI is used as part of the equation for calculating financial needs. It is found by subtracting the Student Aid Index and other financial assistance offered from the cost of attendance at your respective school. Your cost of attendance includes tuition, fees, room and board. Here is the exact equation for your easy understanding: 

  • Financial Need = Cost of attendance – SAI

Your financial need doesn’t necessarily indicate the full amount you’re qualified for. Colleges are in no way obliged to meet 100% of your financial need with need-based aid like grants or scholarships. Also, colleges can include loans on your financial aid award letter to meet the need. This is an important distinction that the name change will clear up going forward.

Recommended Reading: Subsidized Loan Vs An Unsubsidized Loan: Which Is Better And Why

Key Differences

Here are the key differences between EFC and Federal Student Aid Index. 

  • Range: The lowest EFC you can receive at present is $0. However, with the implementation of SAI, you can now receive an SAI as low as -$1,500. This will help you to cover all the other expenses not included in the school’s published cost of attendance.
  • Pell Grant Eligibility: You will be able to see if you are eligible for Pell Grants even before applying for financial aid. 
  • Number of Questions: The new simplified FAFSA consisting of the Student Aid Index, will have a maximum of 36 questions compared with the 108 on the current application having EFC. 

Must Read: CSS Financial Aid Profile Vs. FAFSA

  • Special Circumstances: The new rules of SAI will empower the financial aid administrators to make adjustments to the cost of attendance or the values used to calculate the SAI for students on a case-by-case basis. These adjustments can be made to help certain applicants experiencing exceptional circumstances, such as drastic changes in their incomes since filing their tax returns.


1.Why Is the Student Aid Index (SAI) Important?

The Student Aid Index (SAI) value is significant since a lower number indicates a greater financial need and more eligibility for federal financial aid programs.

2.How is Student Aid Index calculated?

Your Student Aid Index (SAI) will be determined by the financial profile information you enter on the Free Application for Federal Student Aid, or FAFSA, for you and your family. The index will be equal to the total of your income, your parent’s income, and your assets. You will receive your student assistance report, which includes the Student Aid Index, after submitting the FAFSA.

3.What is a Student Aid index?

The Expected Family Contribution (EFC), formerly known as the Student Aid Index (SAI), is now known as the Free Application for Federal Student Aid (FAFSA), which is the application that universities, states, and other scholarship providers use to calculate financial aid packages. It is a figure used by colleges to calculate the amount of financial aid you can receive.

Thank you for reading this blog ‘Student Aid Index: All You Need To Know About The Changes In Financial Aid’. If you enjoyed reading this blog and would like to continue reading more about financing your studies as a student then do check out our following blogs.

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Student Aid Index

Student Aid Index: All You Need To Know About The Changes In Financial Aid

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