Families often look for ways to qualify for more need-based financial aid. The number that determines this is the Student Aid Index (SAI) — the figure colleges use to estimate how much your family can contribute toward college costs.
If you’ve heard the term Expected Family Contribution (EFC) in the past, the SAI replaced it under the FAFSA Simplification Act. While the formula itself can’t be changed, understanding what affects it can help you make choices that may lower your SAI and increase your eligibility for aid.
The strategies below reflect updates for the 2026–27 FAFSA.
If you want to understand how SAI is calculated, read our Student Aid Index overview. For guidance on completing the new FAFSA itself, see our FAFSA Application Guide.
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What Your FAFSA Student Aid Index Means
Each college sets its own financial-aid policies, but most determine need-based aid by comparing your Student Aid Index (SAI) with the school’s Cost of Attendance (COA).
If your SAI is well below the COA, your student has demonstrated financial need and may qualify for more need-based aid. If your SAI is close to or higher than the COA, need-based aid is less likely — though merit scholarships or institutional grants could still be options.
Is It Worth Trying to Lower Your SAI?
That depends on your circumstances. Start by estimating your SAI using the Federal Student Aid Estimator at studentaid.gov. Then, look at the colleges on your student’s list:
- Review their Cost of Attendance and need-based aid policies.
- Use the R2C Insights Tool to see what percentage of students at each school receive need-based aid.
If at least some of your student’s colleges award substantial need-based aid and your estimated SAI is below their COA, then working to lower your SAI could make a real difference.
Here’s how to get started.
Six Strategies to Lower Your SAI
To lower your SAI, you’ll need to plan around both income and assets. FAFSA calculations are based on the “prior-prior” year, meaning the 2026–27 FAFSA uses 2024 tax data. The base year is when income adjustments matter most, while asset changes can be made any time before you file.
For the 2026–27 FAFSA, parents and students must also provide consent for their federal tax information to be transferred through the Department of Education’s FA-DDX system, which replaced the IRS Data Retrieval Tool.
1. Contribute to a Roth IRA or Other Retirement Account
One way to reduce countable assets is to contribute to a Roth IRA, assuming you meet IRS income requirements. Money in retirement accounts — Roth IRAs, traditional IRAs, 401(k)s, or 403(b)s — is not considered an asset for FAFSA purposes.
Because Roth contributions are made with after-tax dollars, they aren’t added back to your adjusted gross income (AGI) in the SAI formula. Contributing to retirement plans can therefore reduce both countable assets and reportable income, especially in future FAFSA cycles.
2. Shift Funds and Minimize Cash
Avoid realizing capital gains in your base year, and try to offset any gains with capital losses. Avoid taking retirement distributions or large bonuses during this period.
To minimize cash counted as an asset, you can:
• Contribute to 529 plans (especially grandparent-owned plans)
• Pay off debt or make planned home improvements
• Make other large purchases before filing the FAFSA
The FAFSA excludes your primary residence in most cases, so home equity and ordinary home improvements generally aren’t counted — unless the property is used for business or rental purposes.
3. Make the Most of a 529 Plan
A 529 savings plan can be a valuable tool for college savings, offering tax-deferred growth and often state tax benefits.
Money in a 529 is treated as a parental asset — even if the student is the beneficiary — which reduces its impact compared with student-owned assets (assessed at about 20 percent versus 5.64 percent).
Tips for optimizing 529s:
• Consider changing ownership to a grandparent if that fits your family’s plan.
• Shift unused funds for siblings into custodial 529s.
• Delay nonessential distributions until later FAFSA years.
• Remember that under current rules, distributions from grandparent-owned 529 plans are no longer treated as untaxed income to the student.
4. Lower the Amount of Money in Your Child’s Name
Student-owned assets count far more heavily than parent assets in the SAI formula. Every $10,000 of student assets can reduce need-based aid by about $2,000, while the same amount in parent assets reduces aid by only about $564.
Ways to reduce student assets include:
• Transferring UTMA or UGMA accounts into custodial 529 plans
• Moving student funds to a parent or grandparent account
• Having the student start a Roth IRA — which doesn’t count as an asset on the FAFSA
Reducing assets in your child’s name is one of the most effective steps to lower your SAI.
5. Reduce or Reallocate Income in the Base Year
Because income carries much more weight than assets (up to 47 percent versus 5.64 percent), lowering your AGI in the base year can make a substantial difference. If you’re self-employed, consider deferring income or increasing deductible business expenses where appropriate.
For 2026–27, the FAFSA uses FA-DDX to import federal tax data. Any untaxed income, such as pre-tax 401(k) contributions, is automatically added back in, while after-tax Roth contributions are not.
If you’re caring for a family member, time off under the Family and Medical Leave Act (FMLA) could reduce earned income without penalty.
Also note that for the 2026–27 award year, students with an SAI equal to or greater than twice the maximum Pell Grant (currently $14,790) are not eligible for Pell. This new rule makes base-year income planning even more important for borderline cases.
6. Reassess Lifestyle and Family Factors
Certain family or lifestyle circumstances can affect whose financial information must be included on the FAFSA and, in turn, your Student Aid Index.
• Divorced or separated parents: If parents are divorced or separated and do not live together, the FAFSA requires information from the parent who provided the most financial support to the student during the prior-prior year — even if the student lived primarily with the other parent. If both parents provided equal support, the parent with the higher income must be reported.
• Remarriage: If the parent who must report information on the FAFSA has remarried before filing, the stepparent’s income and assets must also be included.
• Independent students: If your student meets any of the criteria for independent status — for example, being 24 or older, married, a veteran, serving in the armed forces, a graduate student, or having dependents — the FAFSA does not require parent income or assets.
Understanding how these factors affect FAFSA reporting can help families avoid mistakes and ensure their SAI accurately reflects their situation.
Bonus Update: New Business, Farm, and Fishing Exclusions
For 2026–27, families do not need to report the net worth of:
• A small business with 100 or fewer full-time (or full-time-equivalent) employees
• A family farm where the family resides
• A family-owned commercial fishing business
To qualify for exclusion, the operation must be family-owned and controlled, and the 100-employee test refers to full-time-equivalent workers. Even if the asset is excluded, income from those operations still counts in FAFSA calculations.
The Bottom Line
Lowering your SAI is about awareness and timing, not loopholes. Review income and asset positions during the base year, make smart use of retirement and 529 plans, and keep student assets low.
Top 20 Colleges for Merit Aid With SAI Under $30,000
This crowdsourced data shows which colleges have offered the most merit aid to Road2College members so far with an SAI under $30,000. It is for the 2024-25 academic year, and much of it is repeatable in subsequent years.| College | Merit Aid Offers to Members Under $30K SAI | # of Offers | Avg Offer |
|---|---|---|---|
| Susquehanna University | $508,500 | 12 | $42,375 |
| University of Arizona | $418,500 | 18 | $23,250 |
| University of Scranton | $404,000 | 14 | $28,857 |
| University of Alabama | $394,986 | 17 | $23,234 |
| Rensselaer Polytechnic Institute | $392,500 | 11 | $35,682 |
| Rochester Institute of Technology | $369,800 | 14 | $26,414 |
| Wheaton College | $368,400 | 10 | $36,840 |
| University of Vermont | $334,000 | 18 | $18,556 |
| Miami University-Oxford | $330,000 | 21 | $15,714 |
| Ithaca College | $328,300 | 12 | $27,358 |
| University of Dayton | $327,150 | 11 | $29,741 |
| Quinnipiac University | $325,248 | 11 | $29,568 |
| Stonehill College | $324,000 | 9 | $36,000 |
| Hofstra University | $301,500 | 9 | $33,500 |
| Xavier University | $268,682 | 9 | $29,854 |
| University of Hartford | $259,000 | 9 | $28,778 |
| DePaul University | $252,000 | 10 | $25,200 |
| Seton Hall University | $243,500 | 11 | $22,136 |
| Loyola University Chicago | $242,000 | 9 | $26,889 |
| Stevens Institute of Technology | $238,000 | 9 | $26,444 |
Top 20 Colleges for Merit Aid With SAI From $30,000-$60,000
This crowdsourced data shows which colleges have offered the most merit aid to Road2College members so far with an SAI from $30,000 to $60,000 It is for the 2024-25 academic year, and much of it is repeatable in subsequent years.| College | Merit Aid Offers to Members From $30K-60K SAI | # of Offers | Avg Offer |
|---|---|---|---|
| Susquehanna University | $649,000 | 15 | $43,267 |
| Fordham University | $528,835 | 19 | $27,833 |
| Renssalaer Polytechnic Institute | $522,000 | 14 | $37,286 |
| Loyola University Chicago | $480,999 | 19 | $25,316 |
| Case Western Reserve University | $460,000 | 13 | $35,386 |
| University of Arizona | $446,000 | 18 | $24,778 |
| University of Alabama | $443,525 | 21 | $21,120 |
| Loyola University Maryland | $435,500 | 13 | $33,500 |
| Seton Hall University | $434,500 | 17 | $25,550 |
| Miami University-Oxford | $431,000 | 22 | $19,591 |
| University of Hartford | $429,000 | 14 | $30,643 |
| Saint Joseph's University | $422,000 | 14 | $30,143 |
| Drexel University | $394,100 | 13 | $30,315 |
| University of South Carolina-Columbia | $387,006 | 23 | $16,826 |
| Quinnipiac University | $387,000 | 13 | $29,769 |
| Rochester Institute of Technology | $386,500 | 18 | $21,472 |
| DePaul University | $369,000 | 16 | $24,600 |
| University of Scranton | $358,534 | 12 | $29,878 |
| Ursinus College | $339,580 | 10 | $33,958 |
| Hofstra University | $325,500 | 8 | $40,688 |
Top 20 Colleges for Merit Aid With SAI Above $60,000
This crowdsourced data shows which colleges have offered the most merit aid to Road2College members so far with an SAI over $60,000. It is for the 2024-25 academic year, and much of it is repeatable in subsequent years.| College | Merit Aid Offers to Members Above $60K SAI | # of Offers | Avg Offer |
|---|---|---|---|
| Fordham University | $1,138,032 | 41 | $32,147 |
| Rensselaer Polytechnic Institute | $1,085,050 | 29 | $37,416 |
| University of Vermont | $959,500 | 45 | $21,322 |
| Rochester Institute of Technology | $781,650 | 32 | $24,427 |
| Case Western Reserve University | $772,500 | 24 | $32,188 |
| University of Alabama | $765,825 | 32 | $23,932 |
| Drexel University | $727,000 | 31 | $23,462 |
| Fairfield University | $723,500 | 30 | $24,117 |
| Clark University | $701,500 | 24 | $29,229 |
| Quinnipiac University | $699,500 | 24 | $29,146 |
| Worcester Polytechnic Institute | $686,500 | 26 | $26,404 |
| Wheaton College | $681,000 | 16 | $42,463 |
| Loyola University Chicago | $666,500 | 23 | $28,978 |
| Dickinson College | $627,220 | 15 | $41,815 |
| Miami University-Oxford | $602,000 | 32 | $18,813 |
| Seton Hall University | $544,400 | 20 | $27,220 |
| Ithaca College | $543,500 | 19 | $28,605 |
| Loyola University Maryland | $542,500 | 16 | $33,906 |
| Hofstra University | $530,500 | 15 | $35,367 |
| University of South Carolina-Columbia | $501,529 | 28 | $17,912 |
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Use R2C Insights to help find merit aid and schools that fit the criteria most important to your student. You’ll not only save precious time, but your student will avoid the heartache of applying to schools they aren’t likely to get into or can’t afford to attend.
Other Articles You Might Like:
Choosing a College: Henry’s Story
How Does Financial Aid Work? Understanding the System
How to Apply for Financial Aid for College
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