Federal Aid for College: How Much Can You Expect to Receive?
We often get a common question from parents: “How much financial aid can our child receive?”. The good news is that the government has streamlined the process to make finding the answer much simpler.
Step 1: Determining Annual College Cost of Attendance
To start, we need to determine the annual college cost of attendance (COA). This includes tuition, fees, room and board, books, and other necessary expenses. Knowing this amount is crucial as it forms a basis for determining financial aid eligibility.
Step 2: Understanding the Student Aid Index
The Student Aid Index (SAI) helps calculate eligibility for need-based financial aid. This number results from the information that you provide on your FAFSA form.
Step 3: The Formula
The formula for determining eligibility is simple:
Eligibility = Cost of Attendance (COA) - Student Aid Index (SAI) - Other Financial Assistance
Step 4: Estimating SAI: Income and Assets
To estimate SAI, let’s refer to the table below that categorizes income and assets. Income is listed on the vertical column in grey, while assets are displayed in the green row. It is important to note that primary residence and retirement accounts are excluded from this calculation.
Additional Resource: Student Aid Benefit Estimate Calculator
The U.S. Department of Education offers a Federal Student Aid Benefit Estimate Calculator on their website. This tool allows you to input specific details and receive a personalized estimate of potential aid benefits for your child.
Source: https://studentaid.gov/help-center/answers/article/what-is-sai
Have questions or want to speak with our team directly? Contact us.
Robert Amato, CFP®, CIMA®
Principal
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