Broker Check
Changes Coming to the Free Application For Student Aid (FAFSA) Part 2 of 4

Changes Coming to the Free Application For Student Aid (FAFSA) Part 2 of 4

June 09, 2021

The End of the EFC

Enacted changes described in these posts do not take effect until July 1, 2023, and will appear in the FAFSA beginning Oct. 1, 2022. Remember, tax returns for 2021 will be used in determining financial aid in the 2023–2024 school year.

One important change is that the Expected Family Contribution (EFC) is no more!  The EFC will be re-named the Student Aid Index (SAI). Today, the EFC represents what the federal formula determines a household should be expected to pay, at a minimum, for one year of college. The new law will replace the EFC with a new term – Student Aid Index. Schools will subtract a household’s Student Aid Index from the cost of attending its institution to figure out how much financial aid a student would be eligible for. The Student Aid Index (SAI) will become an "eligibility index" for distributing financial aid, not the dollar amount a family is expected to pay for college expenses (EFC). While the new SAI formula no longer gives households with multiple children in college a significant break in the financial aid eligibility, the new SAI replaces that calculation.

 Watch in the coming days for more information on other important changes being made to this critical component of college funding.

 Have additional questions regarding this or any other planning topic? Contact me for your no-obligation, no fee consultation.