Student Aid Index (SAI) and Pell Grant Eligibility
Beginning with the 2024-25 award year, a student may qualify for a Pell Grant in one of three ways:
Maximum Pell Grant (Max Pell)
Minimum Pell Grant (Min Pell)
Calculated Pell Grant, based on SAI (Calculated Pell = Max Pell minus SAI)
The first two paths to Pell Grant eligibility are briefly discussed below. However, most of this chapter is spent discussing how the SAI is calculated.
General Information
The FAFSA Processing System (FPS) uses data provided by the applicant and contributors on the FAFSA form to determine Max or Min Pell Grant eligibility and calculate the SAI.
Maximum Pell Grant Eligibility Criteria
A student is eligible for a Maximum Pell Grant if any of the following is true:
Dependent Student
The student’s parent(s) is not required to file a federal income tax return; or
The student’s parent is a single parent and has an AGI greater than zero and less than or equal to 225% of the poverty guideline for the applicant’s family size and state of residence; or
The student’s parent is not a single parent and has an AGI greater than zero and less than or equal to 175% of the poverty guideline for the applicant’s family size and state of residence.
Independent Student
The student (and spouse, if applicable) is not required to file a federal income tax return; or
The student is a single parent and has an AGI greater than zero and less than or equal to 225% of the poverty guideline for the applicant’s family size and state of residence; or
The student is not a single parent and has an AGI greater than zero and less than or equal to 175% of the poverty guideline for the applicant’s family size and state of residence.
SAI for Maximum Pell Grant Recipients
A dependent student whose parents are not required to file a federal income tax return OR an independent student (and spouse, if applicable) who is not required to file a federal income tax return for the prior-prior tax year is assigned an SAI equal to -1500. Other students eligible for a maximum Pell Grant will be assigned an SAI equal to 0 or a calculated SAI, whichever is less.
Maximum Pell Grant Eligibility
HEA Sec. 401(b)(1)(A)
Minimum Pell Grant Eligibility Criteria
A student who does not qualify for a Maximum Pell Grant or for a calculated Pell Grant because the SAI is too high can still be eligible for a Minimum Pell Grant if any of the following is true:
Dependent Student
The student’s parent is a single parent and has an AGI less than or equal to 325% of the poverty guideline for the applicant’s family size and state of residence; or
The student’s parent is not a single parent and has an AGI less than or equal to 275% of the poverty guideline for the applicant’s family size and state of residence.
Independent Student
The student is a single parent, and the AGI is less than or equal to 400% of the poverty line; or
The student is a parent and is not a single parent, and the AGI is less than or equal to 350% of the poverty guideline for the applicant’s family size and state of residence; or
The student is not a parent, and the student’s (and spouse’s if applicable) AGI is less than or equal to 275% of the poverty guideline for the applicant’s family size and state of residence.
SAI for Minimum Pell Grant Recipients
Students eligible for a Minimum Pell Grant under this guidance retain their calculated SAI.
Minimum Pell Grant Eligibility
HEA Sec. 401(b)(1)(C)
Student Aid Index (SAI) Formulas
The SAI formulas use income, assets, and the number of persons in the family size for the award year.
The law gives three SAI formulas:
Formula A – Dependent students,
Formula B – Independent students without dependents other than a spouse, and
Formula C – Independent students with dependents other than a spouse
SAI Formulas
HEA Sec. 474-479
Tables used in the computation of the SAI are updated annually and published on the https://fsapartners.ed.gov/knowledge-center/library/resource-type/Federal Registers">Knowledge Center in a Federal Register. The Department’s SAI Formula Guide is also updated annually and available at fsapartners.ed.gov/knowledge-center in the Library section under Resource Type > Handbooks, Manuals, or Guides.
The FAFSA Simplification Act eliminated the simplified needs test and automatic zero provisions. However, some applicants will be exempt from reporting assets and/or will have assets excluded from consideration in the SAI formula.
Applicants Exempt from Asset Reporting
A dependent student is exempt from asset reporting if they meet one of the following criteria.
The applicant qualifies for a Maximum Pell Grant
The applicant’s parents’ 2022 combined AGI is less than $60,000 and they do not file a Schedule A, B, D, E, F, or H, AND
They do not file a Schedule C, OR
They file a Schedule C with net business income of not more than a $10,000 loss or gain.
The applicant or applicant’s parent received a benefit under a means-tested Federal benefit program during the 2022 or 2023 calendar year.
Exception: A dependent student is not exempt from asset reporting if their parents (1) live outside the U.S. or (2) do not file taxes in the U.S. or a U.S. territory, unless their nonfiling is due to having income below the filing threshold.
An independent student is exempt from asset reporting if they meet one of the following criteria.
The applicant qualifies for a Maximum Pell Grant
The applicant’s (and applicant’s spouse, if applicable) 2022 combined AGI is less than $60,000 and they do not file a Schedule A, B, D, E, F, or H, AND
They do not file a Schedule C, OR
They file a Schedule C with net business income of not more than a $10,000 loss or gain.
The applicant or applicant’s spouse received a benefit under a means-tested federal benefit program during the 2022 or 2023 calendar year.
Means-Tested Federal Benefits Programs
The means-tested federal benefit programs are listed in Chapter 2. A person need not have received the benefit for an entire year; receiving it at any time in the base or following year qualifies. Also, an FAA may use professional judgment (PJ) to count a benefit if a person did not receive it during those 24 months but is receiving it now.
No Prorated SAIs
The FAFSA Simplification Act eliminated the provision that allowed schools to use alternate or prorated EFCs (now SAIs) when packaging students for periods other than 9 months. Therefore, you should use the calculated SAI to package a student, regardless of the length of time of the student’s enrollment.
The SAI Worksheets
The 2024-25 SAI Formula Guide contains SAI worksheets and tables for each formula (A, B and C), which can be used to manually calculate an SAI or to see how the SAI is determined for each of the formulas.
The following information provides additional insight into the SAI calculation process and may prove helpful when reviewing the SAI worksheets in the SAI Formula Guide.
Formula A – Dependent Students
The SAI for a dependent student is calculated using the FAFSA data for the student and their parents. The FPS calculates the parents’ contribution from income and assets, the student’s contribution from income, and the student’s contribution from assets; the SAI is the sum of these three values.
Parents’ Contribution from Available Income and Assets
Parents’ available income. The parents’ available income is calculated by subtracting certain allowances from the parents’ total income. These allowances account for certain nondiscretionary expenses, such as taxes and basic living expenses. Once a minimum level of support has been offset for those expenses, the formula assumes that the remaining income is available for discretionary purposes, including paying for a postsecondary education. The available income can be a negative number.
The total income is the sum of the taxable and untaxed income, minus amounts reported in the income but excluded from the formula.
Parents’ taxed/untaxed income. The sum of following items, reported on a U.S. tax return, increases the parents’ total income:
Parents’ AGI
Parents’ deductible payments to self-employed SEP, SIMPLE, Keogh, and other qualified retirement accounts
Tax-exempt interest
Untaxed IRA/pension distributions (excluding rollovers)
Foreign income exclusion
Parents’ income offsets. The sum of the following items decreases the parents’ total income:
Parents’ taxable college grant and scholarship aid (included as income). This amount is self-reported on the FAFSA.
Parents’ education credits. Use the amount reported on the FAFSA.
Parents’ Federal Work-Study (FWS). Beginning with the 2024-25 award year, schools will report FWS earnings by individual earners to the Department of Education. ED will then use this information to report FWS on the individual earner’s FAFSA form.
Parents’ income allowances. The sum of the following allowances reduces the parents’ total income:
Parents’ contribution from assets. The full formula uses the assets of parents of a dependent student and determines a “contribution from assets.” This amount is combined with available income to quantify the family’s financial strength.
First, the parents’ net worth is calculated by adding the following assets reported on the FAFSA form.
Second, the parents’ discretionary net worth is calculated by subtracting the asset protection allowance (“Table A4: Asset Protection Allowance” in the 2024-25 SAI Formula Guide) from the parents’ net worth. Discretionary net worth may be less than zero.
Finally, the discretionary net worth is multiplied by the conversion rate of 12% to get the parents’ contribution from assets, which represents the portion of parental assets considered available to help pay for the student’s college education. If the contribution from assets is negative, it is set to zero.
Calculation of parents’ contribution. This is the final step in determining the parents’ contribution. The parents’ available income and contribution from assets are added together to determine the parents’ adjusted available income, which can be a negative number. The total parents’ contribution from adjusted available income is calculated from the amounts and rates in “Table A5: Parents’ Contribution from Adjusted Available Income” in the 2024-25 SAI Formula Guide. The rates in Table A5 increase from 22% to 47% as the adjusted available income increases. This is based on the principle that as income increases beyond the amount needed to maintain a basic standard of living, the portion used for family maintenance decreases and the portion available for discretionary purposes increases. Therefore, a progressively larger amount of income may be contributed toward postsecondary educational costs. The parents’ contribution from adjusted available income may be negative (as low as -1,500).
Student’s Contribution from Income
Student’s available income. The student’s available income is calculated by subtracting certain allowances from the student’s total income. These allowances account for certain nondiscretionary expenses, such as taxes and basic living expenses. Once a minimum level of support has been offset for those expenses, the formula assumes that the remaining income is available for discretionary purposes, including paying for a postsecondary education.
The student’s available income is the sum of the taxable and untaxed income, minus amounts reported in the income but excluded from the formula (offsets and allowances).
Student’s taxed/untaxed income. The sum of the following items, reported on a U.S. tax return, is the student’s total income:
Student’s AGI
Student’s deductible payments to self-employed SEP, SIMPLE, Keogh, and other qualified retirement accounts
Student’s tax-exempt interest
Student’s untaxed IRA/pension distributions (excluding rollovers)
Student’s foreign income exclusion
Student’s income offsets. The sum of the following items decreases the student’s total income:
Student’s taxable college grant and scholarship aid (included as income). This amount is self-reported on the FAFSA.
Student’s education credits. Use the amount reported on the FAFSA.
Student’s Federal Work-Study (FWS). Beginning with the 2024-25 award year, schools will report FWS earnings by individual earners to the Department of Education. ED will then use this information to report FWS on the individual earner’s FAFSA.
Student’s income allowances. The sum of the following allowances reduces the student’s total income:
Finally, the student’s available income is multiplied by the assessment rate of 50% to determine the student’s contribution from income, which may be a negative number (as low as -1,500).
Student’s Contribution from Assets
The full formula uses the student’s assets and determines a “contribution from assets.”
First, the student’s net worth is calculated by adding the following assets reported on the FAFSA form.
Second, the student’s net worth is multiplied by the conversion rate of 20% to get the student’s contribution from assets. If the contribution from assets is negative, it is set to zero.
SAI Calculation – Dependent Student
The student’s SAI is determined by adding the parents’ contribution, the student’s contribution from available income, and the student’s contribution from assets. The SAI may be negative (but not less than -1,500).
Formula B—Independent Student Without Dependents Other Than a Spouse
The SAI for an independent student without dependents other than a spouse is calculated using FAFSA data for the student and spouse. The FPS calculates a contribution from available income and a contribution from assets; the SAI is the sum of these two values.
Contribution from available income
Student’s (and Spouse’s) available income. The student’s (and spouse’s) available income is calculated by subtracting certain allowances from the student’s (and spouse’s) total income. These allowances account for certain nondiscretionary expenses, such as taxes and basic living expenses. Once a minimum level of support has been offset for those expenses, the formula assumes that the remaining income is available for discretionary purposes, including paying for a postsecondary education. The available income can be a negative number.
The student’s (and spouse’s) available income is the sum of the taxable and untaxed income minus amounts reported in the income but excluded from the formula (offsets and allowances).
Student’s (and spouse’s) taxed/untaxed income. The sum of the following items, reported on a U.S. tax return, is the student’s (and spouse’s) total income:
Student’s (and spouse’s) AGI
Student’s (and spouse’s) deductible payments to self-employed SEP, SIMPLE, Keogh, and other qualified retirement accounts
Student’s (and spouse’s) tax-exempt interest
Student’s (and spouse’s) untaxed IRA/pension distributions (excluding rollovers)
Student’s (and spouse’s) foreign income exclusion
Student’s (and spouse’s) income offsets. The sum of the following items decreases the student’s (and spouse’s) total income:
Student’s (and spouse’s) taxable college grant and scholarship aid (included as income). This amount is self-reported on the FAFSA.
Student’s (and spouse’s) education credits. Use the amount reported on the FAFSA.
Student’s (and spouse’s) Federal Work-Study (FWS). Beginning with the 2024-25 award year, schools will report FWS earnings by individual earners to the Department of Education. ED will then use this information to report FWS on the individual earner’s FAFSA.
Student’s (and spouse’s) income allowances. The sum of the following allowances reduces the student’s (and spouse’s) total income:
Finally, the student’s (and spouse’s) available income is multiplied by the assessment rate of 50% to determine the student’s contribution from income, which may be a negative number.
Student’s (and Spouse’s) Contribution from Assets
The full formula uses the student’s (and spouse’s) assets of the and determines a “contribution from assets.”
First, the student’s (and spouse’s) net worth is calculated by adding the following assets reported on the FAFSA form:
Second, the student’s (and spouse’s) discretionary net worth is calculated by subtracting the asset protection allowance (“Table B3: Asset Protection Allowance” in the 2024-25 SAI Formula Guide) from the student’s (and spouse’s) net worth.
Finally, the student’s (and spouse’s) net worth is multiplied by the conversion rate of 20% to determine the student’s contribution from assets. If the contribution from assets is negative, it is set to zero.
SAI Calculation – Independent Student without Dependents other than a Spouse
The student’s SAI is determined by adding the student’s contribution from income and the student’s contribution from assets. The SAI may be negative (but not less than -1,500).
Formula C—Independent Student with Dependents Other Than a Spouse
The SAI for an independent student with dependents other than a spouse is calculated using FAFSA data for the student and spouse. The FPS calculates a contribution from available income and a contribution from assets; the SAI is the sum of these two values.
Contribution from Available Income
Student’s (and Spouse’s) available income. The student’s (and spouse’s) available income is calculated by subtracting certain allowances from the student’s (and spouse’s) total income. These allowances account for certain nondiscretionary expenses, such as taxes and basic living expenses. Once a minimum level of support has been offset for those expenses, the formula assumes that the remaining income is available for discretionary purposes, including paying for a postsecondary education. The available income can be a negative number.
The student’s (and spouse’s) available income is the sum of the taxable and untaxed income minus amounts reported in the income but excluded from the formula (offsets and allowances).
Student’s (and spouse’s) taxed/untaxed income. The sum of the following items, reported on a U.S. tax return, is the student’s (and spouse’s) total income:
Student’s (and spouse’s) AGI
Student’s (and spouse’s) deductible payments to self-employed SEP, SIMPLE, Keogh, and other qualified retirement accounts
Student’s (and spouse’s) tax-exempt interest
Student’s (and spouse’s) untaxed IRA/pension distributions (excluding rollovers)
Student’s (and spouse’s) foreign income exclusion
Student’s (and spouse’s) income offsets. The sum of the following items decreases the student’s (and spouse’s) total income:
Student’s (and spouse’s) taxable college grant and scholarship aid (included as income). This amount is self-reported on the FAFSA.
Student’s (and spouse’s) education credits. Use the amount reported on the FAFSA.
Student’s (and spouse’s) Federal Work-Study (FWS). Beginning with the 2024-25 award year, schools will report FWS earnings by individual earners to the Department of Education. ED will then use this information to report FWS on the individual earner’s FAFSA.
Student’s (and spouse’s) income allowances. The sum of the following allowances reduces the student’s (and spouse’s) total income:
Student’s (and Spouse’s) Contribution from Assets
The full formula uses the student’s (and spouse’s) assets and determines a “contribution from assets.”
First, the student’s (and spouse’s) net worth is calculated by adding the following assets reported on the FAFSA form.
Second, the student’s (and spouse’s) discretionary net worth is calculated by subtracting the asset protection allowance (“Table C5: Asset Protection Allowance” in the 2024-25 SAI Formula Guide) from the student’s (and spouse’s) net worth.
Finally, the student’s (and spouse’s) net worth is multiplied by the conversion rate of 7% to get the student’s contribution from assets. If the contribution from assets is negative, it is set to zero.
SAI Calculation - Independent Student with Dependents Other than a Spouse
This is the final step in determining the student’s SAI. The student’s available income and contribution from assets are added together to determine the student’s adjusted available income, which can be a negative number. The total student’s contribution from adjusted available income is calculated from the amounts and rates in “Table C6: Assessment from Adjusted Available Income” in the 2024-25 SAI Formula Guide. The rates in Table C6 increase from 22% to 47% as the adjusted available income increases. This is based on the principle that as income increases beyond the amount needed to maintain a basic standard of living, the portion used for family maintenance decreases and the portion available for discretionary purposes increases. Therefore, a progressively larger amount of income may be contributed toward postsecondary educational costs. The number resulting from the assessment according to Table C6 is the student’s SAI and may be negative but not less than –1,500.