The formula starts with total family income, then applies a series of allowances — federal taxes paid, employment expense allowances, and an income protection amount. What remains is called Available Income. A percentage of that, combined with a percentage of available assets, produces the family’s contribution.

Parent income carries the most weight. After allowances are applied, a percentage of the parents’ available income — combined with a percentage of their available assets — produces the parent contribution.

Student income is assessed separately at a higher rate. Students have their own income protection allowance of for the award year. Earnings above that threshold are assessed at 50%.

The formula uses Federal Dependent Formula tables. Your SAI is recalculated each year you file the FAFSA, using income from two calendar years prior — not last year’s income, but the year before that.

The federal formula uses what’s called a “base year” for income — not the year you file the FAFSA, and not last year. It’s two calendar years prior. For ’s Class of , the base year income is what the family earned in . That income was already locked in before most families even start thinking about financial aid.

Assets, unlike income, are reported as of the date the FAFSA is filed — not the prior year. That distinction matters. Income is historical. Assets are current. Both feed the formula, and both affect the number colleges will see.

’s SAI of doesn’t go to one school. It goes to every college on the list simultaneously, the moment each application is submitted. Each school’s Financial Aid Office receives the same number and uses it independently.

Two schools can look at the exact same SAI and arrive at two completely different funding decisions — because each institution has its own formula, its own endowment, and its own priorities for which students it most wants to enroll.

Not every school meets your full need. And the way a school covers your need matters just as much as the amount.

The federal government and colleges together account for 97% of all aid awarded annually. Private scholarships make up just 3% — which is why building the right school list matters far more than chasing outside scholarships.

Parent assets are assessed at approximately 5% in the federal formula. Student assets are assessed at 20%. That means for every $1,000 in a student’s name, $200 is added to the SAI — compared to roughly $50 if that same money were in a parent’s name.

There are legal, legitimate strategies that families use to improve their SAI position before filing. Whether any of those strategies apply to your family depends on your specific asset picture. That conversation belongs in My ACF Premium.

Financial aid comes in two very different forms — and understanding the difference is one of the most important things your family can do before accepting any offer.

Award letters don’t always use the words “loan” or “work-study” clearly. Some schools package loans under names like “Federal Direct Loan” or “Subsidized Stafford” — which sound like aid programs, not debt. Work-study is sometimes listed alongside grants as if it’s the same category. Read every line and ask one question about each item: does this have to be repaid, or does it require the student to work for it? If yes to either — it is not gift aid.