People get shivers and break out into hives when they even begin to think about completing the FAFSA, the Free Application for Student Aid form, that is the foundation and beginning point for even the possibility of receiving financial aid on the federal level and for most colleges. Then panic sets in when you complete the form and see the number that pops out titled your “Expected Family Contribution” – that is if you can even find it on the confirmation page. Could the government really expect me to contribute that amount? It doesn’t seem right. Is this what they are saying I can actually pay for 1 year of my child’s college education? This can’t be. It’s ridiculously high.
Important Updates to the 2023/2024 FAFSA Related to Expected Family Contribution
The federal government has decided to make several changes to the FAFSA, starting with the 2023/2024 aid cycle, which will begin when the FAFSA opens on 10/1/2022. These updates include changing the name from “Expected Family Contribution”, also known as your “EFC”, to “Student Aid Index”, soon to be known as “SAI”.
What Is EFC?
EFC is what the federal government says you can pay for one year of your child’s college education, which is based on, generally, income and assets. It is NOT what you can or are willing to pay for one year of your child’s college education. As we all know, that can be a huge difference. One of the reasons the federal government is changing the name of this illustrious number is because it is deceiving and misunderstood, understandably so, by the recipient of this number.
Many people see their Expected Family Contribution amount and say, oh, that is what I will be expected to pay, whether you feel you can or cannot pay this amount. Well, I have some news for you. This is just the starting point, the baseline for colleges. You will most probably, in 99% of instances, pay more than that. Yes, you heard that right. You are already overwhelmed with what they are saying they have calculated that you can pay only to find out that when you receive your financial aid award letter that you will be paying even more than that amount. Yes, more devastating news. But I digress.
What Is the New Student Aid Index?
As much as the “Expected Family Contribution” is being changed to “Student Aid Index”, the definition is still similar. It is what the federal government is calculating you can pay for 1 year of your child’s college education. So what is changing? Let’s break it down – and I can assure you more information on this will be coming.
1. The FAFSA Will Be Shorter
Hallelujah! The number of questions on the FAFSA will be reduced to 36 vs. the current 108 questions. Of course, with the electronic form, a decision tree has most families completing far less than the 108 currently.
2. Some Student Aid Indexes Calculated Without Assets
Families having an adjusted gross income of $60K or less that have filed a simple tax return will be able to have their SAI calculated with no assets included.
3. Greater Pell Grant Qualifications
For lower income families, there will be more students that will qualify for a full Pell Grant.
4. Increased Disappointment for Higher Income Families
Unfortunately, higher income families may be even more upset by what the updated calculation says you can pay for one year of your child’s college education.
Student Aid Index FAFSA Change Takeaway
So, although I am thankful that the ill-fated, misunderstood and demeaning “Expected Family Contribution (EFC)” is going away and will be buried forever, replaced with a softer term “Student Aid Index (SAI)”, for many families whose income is on the higher end, there won’t be much change. A very big plus, though, is that the form is slated to be simpler, will afford a greater number of lower-income students more funding from the federal government, and in turn, will hopefully encourage and have more families complete it, and not be so intimidated by it.
I am sure in the coming months and year there will be much more written about these changes to the FAFSA and therefore more knowledge will be imparted on us making us an educated consumer. I will hold off on making any conclusions or celebrating until the proof is concrete and we are able to experience the actual new form and therefore the updated Student Aid Index (SAI). Stay tuned. Way more to follow on this one.
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