FAFSA Student Aid Index and EFC 2 — Questions and Answers
Question 1: Under the FAFSA Simplification Act, how does having multiple children in college affect the SAI?
- SAI is divided equally among siblings
- Each sibling gets their own separate SAI (Correct answer)
- SAI is doubled for each sibling
- SAI is unaffected by siblings
Correct answer: Each sibling gets their own separate SAI
Starting with the 2024-25 FAFSA, each student receives their own individual SAI rather than dividing the family's EFC.
Question 2: What prior-prior year income does the 2025-26 FAFSA use?
- 2022 income
- 2023 income (Correct answer)
- 2024 income
- 2025 income
Correct answer: 2023 income
The 2025-26 FAFSA uses 2023 federal tax return data, following the prior-prior year (PPY) rule.
Question 3: Which asset type is NOT reported on the FAFSA for parents?
- Savings accounts
- 529 college savings plans
- Primary home equity (Correct answer)
- Investment accounts
Correct answer: Primary home equity
The primary home equity is not reported on FAFSA, unlike investment properties or savings accounts.
Question 4: Small business assets are excluded from FAFSA if the business has fewer than how many full-time employees?
- 10
- 25
- 50 (Correct answer)
- 100
Correct answer: 50
Family-owned businesses with fewer than 100 full-time employees are excluded from FAFSA asset reporting.
Question 5: How are retirement accounts treated in the SAI calculation?
- Fully counted as assets
- Counted at 50% value
- Not counted as assets (Correct answer)
- Only counted if over $50,000
Correct answer: Not counted as assets
Retirement account balances such as 401(k)s and IRAs are not reported as assets on the FAFSA.
Question 6: What percentage of student assets is assessed in the SAI formula?
- 5.64%
- 12%
- 20% (Correct answer)
- 25%
Correct answer: 20%
Student-owned assets are assessed at 20% in the SAI formula, compared to a maximum of 5.64% for parent assets.
FAFSA Student Aid Index and EFC 2
Under the FAFSA Simplification Act, how does having multiple children in college affect the SAI?