FAFSA Changes — Student Aid Index

FAFSA Simplification Act and the Student Aid Index

On Dec. 27, 2020, Congress passed the Consolidated Appropriations Act. The law contains provisions that amend the FUTURE Act and includes the FAFSA Simplification Act — a sweeping redesign of the processes and systems used to award federal student aid. One such change is replacing the Expected Family Contribution (EFC) with the Student Aid Index (SAI), which will be implemented for the 2024–25 award year.

Benefits for Students and Families

Replacing the EFC With the SAI

The SAI is an evaluation of the financial resources that may be available to contribute toward a student's education expenses. Among the many changes, the need analysis formula removes the number of family members in college from the calculation, allows a minimum SAI of –1500, and implements separate eligibility determination criteria for Federal Pell Grants.

What will stay the same?

The Free Application for Federal Student Aid (FAFSA^®) process will remain the same for the following:

• Applicants will provide income, asset, and family information on the FAFSA form.
• The number of family members in college will remain a question on the form but will not be used in the SAI or Federal Pell Grant eligibility calculations.
• The need analysis formula will remain: Cost of Attendance – Student Aid Index – Other Financial Assistance = Financial Need.
• An applicant's SAI is still determined by one of three formulas: dependent students, independent students without dependents other than a spouse, and independent students with dependents other than a spouse.

What will change?

Beginning in the 2024–25 award year, changes to the FAFSA process will include the following, among others:

• The Simplified Needs Test formula and automatic-zero EFC were eliminated. Some applicants will still qualify for an automatic maximum Federal Pell Grant or be exempt from asset reporting based on similar criteria.
• The income and asset components, as well as the allowances against those components, used in the SAI calculation have been updated significantly.
• The definition of family size now aligns with the number of individuals reported as dependents on the applicant's (if independent) or applicant's parents' (if dependent) U.S. tax return. Applicants may also update their family size if it changes after filing their U.S. tax return.

Federal Pell Grant eligibility will be determined in three steps:

1. Maximum Federal Pell Grant – Applicants may qualify for a maximum Federal Pell Grant award based on family size, household income, and poverty guidelines. Students qualifying for a maximum Federal Pell Grant will have an SAI between –1500 and 0.
2. SAI – Applicants who do not qualify for a maximum Federal Pell Grant award may still qualify for a Federal Pell Grant if their calculated SAI is less than the maximum Federal Pell Grant award for the award year. The applicant's Federal Pell Grant award for full-time enrollment will be equal to the maximum Federal Pell Grant for the award year minus the SAI. The Federal Pell Grant will be adjusted if the applicant enrolls less than full time, or if the applicant's cost of attendance is less than the calculated Federal Pell Grant award.
3. Minimum Pell Grant – Applicants whose SAI is greater than the maximum Federal Pell Grant award for the award year may still qualify for a Federal Pell Grant, based on family size, household income, and poverty guidelines.

Federal Student Aid Resources

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