Expected Family Contribution (EFC), which will soon be replaced by the Student Aid Index (SAI), is a measure of how much a student and their family can be expected to contribute to the cost of college for an upcoming academic year. Your EFC/SAI is an important number because it impacts how much need-based financial aid you qualify for.
EFC meaning is sometimes mistaken as the dollar amount that a student and their family will pay for college. However, the amount families end up paying could be significantly more or less than the EFC, depending on the cost of attendance and scholarships.
As a result of this confusion, the EFC will be replaced by the Student Aid Index (SAI) starting in the 2024-2025 academic year. While the name change is essentially just a rebranding, there will be some changes in how a family’s expected contribution will be calculated. The change is part of the new, simplified Free Application for Federal Student Aid (FAFSA) that will be available to students in December 2023.
Here’s what you need to know about EFC/SAI and how it affects your potential aid.
Expect Family Contribution vs Student Aid Index
The Expected Family Contribution and Student Aid Index are essentially the same thing — an estimate of how much money a family can contribute out of pocket toward a student’s college education based on information provided on the FAFSA.
However, it’s only an estimate. As college tuition has gone up over the years, many students will pay significantly more than the EFC/SAI amount that the FAFSA form generates. The change from Expected Family Contribution to Student Aid Index reflects that the amount is simply a guideline, not a determination of what an applicant will pay. The switch to SAI also comes with some differences in how a family’s EFC is calculated (more on that below).
Like EFC, SAI is a vital metric used to determine how much — if any — federal financial aid students will receive to help them pay for college. However, it’s not the only factor. Eligibility for federal aid also takes into account a student’s year in school, enrollment status, and the cost of attendance at the school the student will be attending.
💡 Quick Tip: Some lenders help you pay down your student loans sooner with reward points you earn along the way.
How Colleges Used the Information
Once you complete the FAFSA, college financial aid staff will use all the information provided to determine your financial need.
Here’s the process:
1. The college financial aid staffers decide your cost of attendance (which includes tuition, fees, room and board, and books) at that school.
2. They then consider your EFC/SAI.
3. Next, they subtract your EFC/SAI from your cost of attendance to determine how much need-based aid you can get.
For example, let’s say a school’s total cost of attendance is $30,000 and your EFC/SAI is $8,000. You could qualify for up to $22,000 of need-based aid through programs like federal Pell Grants, direct subsidized loans, and the work-study program.
That doesn’t necessarily mean you will get that much aid, however. Colleges aren’t required to meet 100% of a student’s demonstrated financial need (the total cost of attendance minus your EFC/SAI). The amount you receive will depend on funding availability at your school, and how much has already been given out to other students.
Generally, the lower the SAI/EFC value, the higher the financial need, and the greater the eligibility for federal financial aid programs, such as Pell Grants, Direct Subsidized Loans, federal work-study programs.
Your offer of financial aid may change from year to year.
How Your EFC/SAI Is Calculated
EFC/SAI methodology utilizes financial information from the FAFSA (such as taxed and untaxed income, investments, assets, benefits, and household size) to quantify an applicant’s financial need. With the change to a simplified FAFSA, however, students and families will not only see a different measure of their ability to pay (SAI vs EFC), but will also experience a change in the methodology used to determine aid.
One key change is that, unlike the EFC, the SAI will not factor in the number of family members currently enrolled in college (which benefited families with multiple children in college). Three other changes that will happen with the switch from EFC to SAI:
• Unlike the EFC, SAI can be a negative number (as low as -$1,500). This enables financial aid officers to better differentiate levels of need.
• SAI will increase the Income Protection Allowance (IPA), which shelters a certain amount of parent income from being included in the calculation of total income.
• The SAI calculation will eliminate the EFC allowance for state and local taxes.
After you complete the FAFSA, your EFC/SAI will be listed in the top right corner of your Student Aid Report, which outlines financial aid eligibility.
Calculating EFC/SAI With the CSS Profile
Around 200 colleges require students to provide supplemental financial information through the College Scholarship Service (CSS) Profile. The 2023-2024 list of participating institutions is available online .
Colleges may customize their questions on the CSS Profile to capture more information to evaluate a student’s financial need. For instance, the CSS Profile may ask about home value and financial information from both households if a student’s parents are separated. The CSS Profile may also consider the regional cost of living and personal circumstances in its calculation of financial need.
These colleges use the CSS Profile to calculate a different EFC/SAI for awarding their own financial aid funds. Typically, they will use their own institutional EFC/SAI methodology when determining a financial aid award.
While filling out the CSS Profile is extra work, it can give you access to private student aid from many universities and scholarship programs. However, the CSS is not used to determine federal financial aid.
Federal Need-Based Aid Available for Qualifying Students
Depending on your EFC/SAI and other eligibility criteria, a financial aid package could include the following need-based federal student aid programs.
• Federal Pell Grant: Student eligibility for a Pell Grant is determined by financial need and the funding amount can fluctuate each year. For the 2023-2024 academic year, the maximum award is $7,395. The amount an individual student may receive depends on a number of factors.
• Federal Supplemental Educational Opportunity Grant (FSEOG): Participating schools receive a set amount of federal funding that is distributed to students based on financial need each year. Eligible students can receive between $100 and $4,000 a year based on funding availability and their overall financial aid package.
• Direct Subsidized Loans: Undergraduate students with financial need may qualify for subsidized loans — a type of federal student loan that does not accrue interest payments while you are in school at least half-time. Students also receive a six-month grace period on interest payments after graduation and may qualify for a deferment based on income, health, continuing education, military service, and other factors.
• Federal Work-Study: This program provides part-time employment for undergraduate and graduate students with financial needs at participating schools. The total work-study award depends on the level of need, the timing of application, and a school’s available funding.
💡 Quick Tip: Federal student loans carry an origination or processing fee (1.057% for Direct Subsididized and Unsubsidized loans first disbursed from Oct. 1, 2020, through Oct. 1, 2024). The fee is subtracted from your loan amount, which is why the amount disbursed is less than the amount you borrowed. That said, some private student loan lenders don’t charge an origination fee.
Fill Out the FAFSA Early?
Even if you qualify for a specific amount of need-based aid, you may not receive all of it. That’s because the amount a student receives depends on the available funding at their school.
Colleges are not required to meet 100% of a student’s financial need, and some programs like the Pell Grant have limited funds that are divided up among schools each year.
It can be a smart idea to fill out the FAFSA as soon as possible to ensure they are among the first in line to receive available aid.
Typically, the FAFSA is available as of October 1 for the following academic year. However, the simplified FAFSA will not be available to students until December 2023 for the 2024-25 academic year. You have until June 30, 2024 to fill it out, but earlier may be better than later. Stay tuned for more updates on the new FAFSA deadline.
Bridging the Financial Gaps
Once you get your EFC/SAI and financial aid package (which may include scholarships, grants, work-study, and federal loans), you may find there are still some gaps in funding. If you’ve already exhausted federal loan options, you might consider looking into the possibility of getting a private student loan.
Unlike federal student loans, private loans require a credit check. Students who have strong financials (or who have cosigners who do) generally qualify for the best rates and terms. Just keep in mind that private loans don’t come with government protection programs, like forgiveness or forbearance, offered by federal student loans.
If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.
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