Calculating Financial Need

The information students report when completing the FAFSA is used in a formula established by the Department of Education that calculates a Student Aid Index (SAI). The EFC is the amount students and their families are expected to have available toward the student’s educational costs. For the Federal Pell Grant program, if the SAI is below a certain number, students are eligible for a Pell Grant, assuming they meet all other eligibility requirements. There is no maximum SAI that defines eligibility for college-based programs. Instead, the SAI is used in an equation to determine financial need:

 Cost of Education

– Student Aid Index

= Financial Need

The difference between the cost of education and the SAI is considered the student’s financial need. The financial need calculation helps the Financial Aid Office establish eligibility for grants, loans, and work-study. The combination of financial aid from these sources is called a financial aid package, and it is meant to help meet the student’s financial need.

A booklet describing the formula that produces the EFC is available by writing to:

Federal Student Aid Information Center

P.O. Box 84

Washington, DC 20044