What is the Student Aid Index?

New or returning FAFSA applicants may see some new terminology as they revisit the online federal student loan process this year.

By Al Dickenson — November 16, 2023


What is the Student Aid Index?

New or returning FAFSA applicants may see some new terminology as they revisit the online federal student loan process this year. First and foremost in the updated terminology is the replacement of the Expected Family Contribution with the Student Aid Index. While these two calculation methodologies work similarly, there are a few key differences to understand.

Like the Expected Family Contribution system, the Student Aid Index will require you to import the vital financial information of your household of residence. This would include household income, investments, assets, and the number of students currently enrolled in college, among other questions. Until December 2023, this is what is used to determine your eligibility for federal student aid, Pell grants, and similar benefits.

After determining eligibility, the amount of aid can vary, depending on what financial information you input into the FAFSA application. From there, your school of choice will have their financial aid professionals work with the federal government to determine how much aid you will receive. This determination is largely based on the Expected Family Contribution and how it compares to the total cost of schooling, including room and board, various fees, and of course tuition itself. For example, let us say that the total cost is $30,000 every year. If your Expected Family Contribution is $10,000, then you should, in theory, be eligible for up to $20,000 in student aid. That being said, just because you are eligible for that amount does not mean you will receive it. However, it is always in your best interests to negotiate for a better deal.

The only real difference between the Expected Family Contribution and the Student Aid Index is that the current system, the Expected Family Contribution, takes into account the schooling of other family members, beyond your own. This means that there will no longer be what was known as the "sibling discount" for parents or guardians paying for the education of more than a single student. The point of this reduction in variables is to simplify the FAFSA process. For many years, its complexity has befuddled even the most technologically and financially-able minds. Likewise, it has long been a misconception that the Expected Family Contribution ($10,000 in the example above) would be all that the family has to pay. This is not always the case, with other costs, like fees and interest from both subsidized and unsubsidized loans accumulating as well.

In a similar vein, but less impactful for many students, the FAFSA process will also no longer consider the value of family owned small businesses or farms. While this will impact fewer people, those in more rural areas, small towns, and big cities with many small businesses may be affected. This is another consideration to factor into your higher education decision(s).

Aside from Expected Family Contribution name change, there are a few other terminology updates. These include the changes to the Simplified Needs Test (SNT), which now will be known as the Applicants Exempt from Asset Reporting (AEAR). Also, the Student Aid Report (SAR) will now be known as the FAFSA Submission Summary (FSS).

All told, the average FAFSA applicant will likely see little difference in their application process this fall and into next spring. Aside from a few updates to the terminology, largely to simplify and better describe the content seen, the only major difference is how the Student Aid Index will determine eligibility and calculate the amount received. With these changes in place, hopefully applicants will find the process a little smoother and a little less confusing than it has been for previous generations.

Al Dickenson

Al Dickenson

Al Dickenson graduated from Wisconsin Lutheran College with bachelor’s degrees in history, communication, and English. He currently serves as an editor for an international equine practitioners’ magazine in and around Milwaukee, Wisconsin, his hometown, where he lives with his wife.
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