The Student Aid Index (SAI) is a number calculated from your FAFSA that represents your family's financial strength for paying for college. It replaced the Expected Family Contribution (EFC) starting with the 2024–25 FAFSA under the FAFSA Simplification Act.
A lower SAI means more demonstrated financial need. Schools subtract the SAI from their Cost of Attendance (COA) to determine your financial need and the aid package they'll offer. The SAI can be negative (as low as −1500), which indicates maximum need.
The Federal Methodology SAI formula combines parent and student financial information:
Parent contribution from income: Adjusted gross income minus allowances (income protection, state tax, Social Security, and employment expense allowances), then multiplied by a progressive rate from 22% to 47% depending on available income.
Parent contribution from assets: Net discretionary assets × 5.64% assessment rate.
Student contribution from income: Student income above a $7,600 allowance × 50%.
Student contribution from assets: Student assets × 20%.
The total is divided by the number of family members enrolled in college simultaneously. Our calculator uses a simplified version of this formula — your actual FAFSA result may differ.
Several factors can cause our estimate to differ from your official FAFSA SAI: untaxed income (Social Security, child support, IRA distributions), specific asset categories, business and farm assets, the number of household members' ages, and school-specific professional judgment adjustments.
Our tool provides a planning estimate — use it to understand your approximate need and explore scenarios. Your official FAFSA submission will produce the authoritative SAI used by schools.
EFC (Expected Family Contribution) was the term used on FAFSA forms before 2024–25. SAI (Student Aid Index) replaced it under the FAFSA Simplification Act. The new formula expanded Pell Grant eligibility significantly, simplified the asset calculation, removed the sibling enrollment discount, and made other structural changes. The SAI can be negative (the old EFC could not go below zero).
For the 2025–2026 academic year, the fixed federal student loan interest rates are:
Subsidized & Unsubsidized Direct Loans (undergraduate): 6.53%
Unsubsidized Direct Loans (graduate/professional): 8.08%
Direct PLUS Loans (parent and graduate): 9.08%
These rates are fixed for the life of loans disbursed in the 2025–2026 year. New rates are set each July 1 based on the 10-year Treasury note auction in May.
SAVE (Saving on a Valuable Education) is an income-driven repayment plan introduced in 2023 as the successor to the REPAYE plan. For undergraduate loans, payments are capped at 5% of discretionary income (defined as income above 225% of the federal poverty line). Graduate loan payments are capped at 10%. Borrowers with mixed undergraduate/graduate loans pay a weighted percentage.
Forgiveness occurs at 10 years for original balances of $12,000 or less, and at 20 years for undergraduate-only borrowers, 25 years for any graduate loans. Important: SAVE has faced significant legal challenges in federal courts in 2025–2026 and may be modified or unavailable. Always verify current plan status at studentaid.gov.
Refinancing federal loans into private loans can lower your interest rate — but the trade-off is significant. You permanently forfeit: income-driven repayment (SAVE, PAYE, IBR, ICR), Public Service Loan Forgiveness (PSLF), federal deferment and forbearance options, and discharge protections (death, disability).
Refinancing makes the most sense if you have a stable, high income, no plans to pursue PSLF, and you're confident you don't need federal safety nets. We strongly recommend consulting a certified student loan counselor (NFAA) before refinancing federal loans.
PSLF forgives the remaining balance on Direct federal loans after 120 qualifying monthly payments (10 years) while working full-time for a qualifying employer — government agencies, 501(c)(3) nonprofits, and certain other public service organizations.
You must be enrolled in an income-driven repayment plan to make qualifying PSLF payments. The forgiven amount under PSLF is not subject to federal income tax. Private loans and refinanced federal loans do not qualify.
Under the American Rescue Plan Act, forgiven student loan amounts are excluded from federal taxable income through December 31, 2025. Congress may extend this exclusion, but it is not permanently established in law. For IDR forgiveness occurring after 2025, forgiven amounts may be treated as taxable income under current law.
PSLF forgiveness is permanently excluded from federal income tax by statute. State income tax treatment varies — some states tax forgiven amounts even when the federal government does not. Consult a tax professional for advice specific to your situation.
Capitalized interest is unpaid interest that gets added to your principal balance, typically when repayment begins after graduation, deferment, or forbearance. Once capitalized, you pay interest on the higher balance — meaning you pay interest on interest.
For example: a $30,000 loan at 6.53% accrues about $1,960 in interest per year while in school. After four years that's ~$7,840 in unsubsidized interest. If capitalized, your starting repayment balance becomes ~$37,840, and your lifetime interest paid increases significantly. Subsidized loans do not accrue interest while you're enrolled at least half-time.
Our calculators use standard federal formulas and 2026 data. Loan payment calculations are mathematically exact. SAI estimates are reasonable approximations of the Federal Methodology but may not match your official FAFSA result due to factors our simplified calculator cannot capture.
IDR repayment projections include income growth assumptions and simulate plan rules as published in 2026 — but IDR rules change frequently. All results are planning estimates, not guarantees.
No. Every calculation runs entirely within your browser using JavaScript. No income, asset, or personal financial data is transmitted to our servers. We have no ability to see what you enter into our calculators. See our Privacy Policy for full details.
No. CollegeAidCalc is an independent website operated by Berean Defense, LLC. We are not affiliated with the U.S. Department of Education, Federal Student Aid, FAFSA, or any college or university. Our calculators are built using publicly available federal formulas and data.
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