FAFSA SAI Guide (2026-27 Changes)

FAFSA Simplification Act Changes (2026-27 Onward)

Massive overhaul of FAFSA effective 2026-27 academic year: (1) Expected Family Contribution (EFC) renamed STUDENT AID INDEX (SAI). (2) Number of questions reduced from 108 to ~30. (3) Auto-zero EFC raised — families with AGI under $60,000 (single parent) / $85,000 (married) likely auto-qualify for max Pell. (4) MULTI-CHILD DISCOUNT REMOVED — old formula divided parent contribution by number in college; new formula does NOT. This hurts families with multiple kids in college simultaneously. (5) Sm

What Counts vs Doesn't Count

PARENT ASSETS that count: cash, savings, checking, investments (taxable), 529 plans owned by parent or student, second homes, rental real estate, business assets (now). PARENT ASSETS that DON'T count: primary residence equity, retirement accounts (401k, IRA, Roth, pension), life insurance cash value, small farm if family-operated. STUDENT ASSETS hit much harder (20% rate vs 5.64% for parents): UTMA/UGMA accounts are STUDENT assets. Strategy: move UTMA money to 529 in parent's name BEFORE filing

Income — The Biggest Driver

Income drives 70%+ of SAI for most middle-class families. Parent AGI from 2 tax years prior (2023 AGI for 2026-27 FAFSA). Plus untaxed income: tax-deferred retirement contributions, child support received, untaxed pension distributions, foreign income exclusion. Critical: Roth conversions, IRA-to-Roth, large capital gains, business asset sales all SPIKE AGI temporarily. Sophisticated families time these for AGI years not affecting FAFSA. Income protection allowance: ~$30k for parent family of 4.

Aid Eligibility by SAI

SAI ≤ -1,500: maximum Pell Grant $7,395 (2026-27). SAI 0: typically full Pell eligibility. SAI $5,000-$15,000: partial Pell, subsidized loan eligibility, work-study. SAI above $30,000: minimal federal need-based aid; unsubsidized Stafford loans + Parent PLUS only. Private colleges with CSS Profile use SEPARATE methodology — often more generous for lower-middle-income families at expensive schools (Harvard, Yale, Stanford routinely free for families under $75-150k). State aid varies enormously: C

Not financial advice. This calculator is for general information and education only. Figures are estimates and may not reflect your circumstances. For decisions, consult the FCA register and a qualified financial adviser. See our editorial standards.

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