FAFSA Student Aid Index and EFC 2

Question 1

Under the FAFSA Simplification Act, how does having multiple children in college affect the SAI?

Accepted Answer

Each sibling gets their own separate SAI

Answer

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?

Accepted Answer

2023 income

Answer

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?

Accepted Answer

Primary home equity

Answer

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?

Accepted Answer

50

Answer

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?

Accepted Answer

Not counted as assets

Answer

Retirement account balances such as 401(k)s and IRAs are not reported as assets on the FAFSA.

FAFSA Practice Test