Financial Aid Methodology

Primary sources

The financial aid eligibility formula is defined in 20 USC 1087oo through 1087rr (the Expected Family Contribution formulas in the Higher Education Act). The FAFSA Simplification Act (enacted 2020, effective 2023-24) replaced EFC with Student Aid Index (SAI) and changed the income protection allowance, asset assessments, and family size adjustments — we use the post-simplification SAI formula.

ED's Student Aid office publishes the Application and Verification Guide (AVG) each year, which documents the exact formulas and tables used to compute SAI. We use the AVG as the authoritative computational reference.

SAI formula components

SAI (dependent student) = parent contribution + student contribution. Parent contribution = (available income × income assessment rate) + (available assets × 5.64%). Available income = adjusted available income - income protection allowance - taxes paid. The income protection allowance table is published annually in the AVG.

Student contribution = (student income × 50%) + (student assets × 20%). Note the higher assessment rates on student assets — this is why financial aid planning often focuses on whose name assets are in.

Pell Grant calculation

Pell Grant = maximum Pell award - SAI (floors at $0, capped at maximum award). The maximum Pell Grant for 2024-25 is $7,395 (published by ED annually). Students with SAI = 0 receive the full maximum. Our calculator computes estimated Pell eligibility based on the SAI formula output.

Limitations

SAI is an estimate, not a guaranteed aid offer. Institutional aid policies vary widely — colleges may use their own methodology (CSS Profile) that differs from FAFSA SAI. Verification (review of tax documents by the financial aid office) may change calculated figures. Professional judgment by financial aid administrators is permitted under federal law.

Update protocol

This category is reviewed quarterly. Immediate updates are triggered by changes to the primary source documents listed in the citations above — rate table revisions, new agency guidance, or regulatory amendments.

Error reports go to info@bedrockatools.com. Corrections are published on our corrections page.