Student Aid Index (SAI) vs. EFC: What’s the Difference?
What’s Covered:
- What is SAI?
- What is EFC?
- Why Did FAFSA Switch to SAI?
- Other New Changes to the FAFSA
- Schools with the Most Generous Financial Aid
In December 2020, Congress passed the FAFSA Simplification Act, which ushered in a host of changes to staples of college financial aid—including streamlining the FAFSA form itself, replacing Expected Family Contribution with the Student Aid Index, and increasing Pell Grant Eligibility.
Here’s what you need to know about the changes to financial aid resulting from the FAFSA Simplification Act.
What is SAI?
The Student Aid Index (SAI) is a replacement for Expected Family Contribution (EFC) and is a calculation of the amount of need-based financial aid a student is eligible to receive.
What is EFC?
Expected Family Contribution (EFC) was an assessment of a student’s family’s available financial assets—including income, savings, and investments—used to determine financial need. Despite its misleading name, EFC was not a calculation of the amount of money a student’s family is expected to pay.
Why Did FAFSA Switch to SAI?
At its most basic, SAI is simply a rebranding of EFC in an effort to more accurately reflect what the figure represents, which is the amount of financial aid a student is eligible to receive. In the past, EFC created confusion and led students to believe it was a calculation of what they were expected to pay.
The rebranding of EFC to SAI is effective on July 1, 2023—the change is part of the FAFSA Simplification Act that was bundled into the Consolidated Appropriations Act of 2021. Although the SAI and EFC are similar, there are some notable differences:
- Range: Applicants can receive an SAI as low as -$1,500 which helps make it easier to more accurately determine an applicant’s financial need and account for expenses not included in the published cost of attendance of schools. Conversely, the lowest EFC an applicant could receive was $0.
- Pell Grant Eligibility: Applicants will see if they qualify for a Pell Grant before the FAFSA is submitted if their adjusted gross income (AGI) is less than a certain threshold determined by the poverty line. Pell Grants may be offered to students, using SAI, who don’t qualify on AGI alone.
- Multiple Students: SAI is not divided based on the number of students in college within a family. EFC provided special treatment to families with multiple members attending college—the parent assessment was divided by the number of family members in college.
Ultimately, SAI is used to calculate a student’s financial need. The basic equation looks like this:
- Cost of attendance – SAI = Financial Need
Other New Changes to the FAFSA
In addition to replacing EFC with SAI, the FAFSA Simplification Act made some other changes to the FAFSA.
Simplified FAFSA Form
As the name of the act implies, the FAFSA form has been streamlined. The new FAFSA will ask a few dozen questions, while the current FAFSA features over 100 questions.
Easier Information Inputs
Another way that the FAFSA Simplification Act makes the form easier to complete is that it allows applicants to import their tax information directly from the IRS, rather than having them dig through old tax forms and manually enter the information.
Increased Eligibility
The FAFSA Simplification Act eliminated certain requirements and restrictions that limited eligibility. Students are no longer required to register for Selective Service to receive financial aid. It also makes aid available to students convicted of drug-related charges and makes Pell Grants available to students incarcerated in federal and state prisons who are enrolled in approved prison education programs.
Cost of Attendance Expanded
Under the FAFSA Simplification Act, colleges are required to disclose more information about their cost of attendance. Some expenses colleges must now account for when calculating the cost of attendance include:
- Cost of books, course materials, and computer
- Transportation expenses
- Personal expenses
- Living expenses (like room and board)
- Loan fees
Increased Income Protection
The current FAFSA does not consider a percentage of income when determining what students can pay for college. The FAFSA Simplification Act raises that percentage. The new system boosts the income protection allowance to 20% and parent income protections are increased to $23,330 for two-person families with one dependent.
Eliminates Time Limits on Subsidized Loans
Current rules only allow students to receive subsidized student loans for up to 150% of the published length of their program. This means students enrolled in four-year programs can only receive subsidized loans for six years. The new rules eliminate this restriction.
Schools with the Most Generous Financial Aid
Navigating the cost of college is often confusing. This is because colleges with high costs of attendance are often less expensive to attend than schools with lower costs of attendance, as some schools are simply more generous in awarding aid that doesn’t require repayment (consequently lowering their cost) than others.
For example, a recent CNBC article listing the ten colleges awarding the most financial aid consisted of pricey private institutions:
- Vanderbilt University
- Williams College
- Washington University in St. Louis
- California Institute of Technology
- Bowdoin College
- Rice University
- Thomas Aquinas College
- Grinnell College
- Skidmore College
- College of the Atlantic
Some colleges and universities on the list above—like Vanderbilt and Rice—further help their students control costs with no-loan financial aid policies. These schools use grants and work-study programs that don’t require repayment to ensure students’ financial needs are met without the use of loans.
Other schools on the aforementioned list are committed to meeting 100% demonstrated need. That is, they’ll meet all of the financial need of their students. Some colleges that meet 100% demonstrated need do so without requiring loans, some require loans based on economic thresholds, and some include loans in all their financial aid packages regardless of students’ economic position.
Students building their college list will want to check out our free college search tool. Using it, students can explore hundreds of colleges and universities and filter them based on a variety of factors, like public or private, estimated net cost, majors, and location to name a few.
