Category: Need-based Financial Aid

The rules and requirements for single, separated or divorced parents differ depending on the financial aid application. The information below clarifies the rules for both FAFSA (Free Application for Federal Student Aid) and the CSS Profile.

Which parent completes the CSS Profile?

Most CSS Profile colleges will require both biological parents to submit their information, even if the parents are 1. Never married, 2. Separated, or 3. Divorced. Both the custodial parent and the noncustodial parent submit their information separately and securely into a single student application that the colleges receive. Information submitted by each biological parent is never shared with the other parent.

Who is the custodial parent?

CSS Profile follows the same criteria as FAFSA in determining who the custodial parent is. The custodial parent submits their information in the primary application submitted by the student. This application is completed using the student’s College Board login, so no additional login needs to be created by the custodial parent. In the primary application, the student identifies their other parent and invites that parent to contribute to their CSS Profile application.

How does the noncustodial parent submit her/his information?

The noncustodial parent creates a College Board login to submit her/his information. The parent links the information that they are submitting by using the CSS Profile Financial Aid ID, aka “CBFinAid ID,” associated with the student’s primary application. This ensures the information is combined into one application for the college. No access to this information is granted to either the student or non-custodial parent.

What if either parent is remarried?

If either parent is remarried, the remarried parent reports financial information for themself and their spouse. This is true even if the new spouse has not adopted the student. The CSS Profile requires the entire household’s financial information.

What if the noncustodial parent cannot or will not submit the application?

CSS Profile colleges do not consider a parent’s unwillingness to participate and submit their information as sufficient reason not to collect this information. Non-submission by either parent prevents a college from processing the student’s financial aid application for institutional need-based aid.

Colleges provide a formal waiver process for a student to petition for the noncustodial parent information to be omitted or waived. The waiver must be submitted separately to each college’s financial aid office, and each college uses its own evaluation process and discretion in granting a waiver.

The standard waiver request form clearly states circumstances that will and will not be considered for the waiver, often requiring “no contact” with the noncustodial parent. However, each college creates its own criteria for which circumstances to consider. Colleges may also require documentation to support your waiver.

You can review the entire standard waiver request form using the link below. Remember to check with your specific college’s financial aid office, as they may have created their own institutional waiver request form.

Resource center for divorced or separated parents on the CSS Profile website

The CSS Profile Info for Divorced or Separated Parents resource center includes several resources, including:

• PDF on Creating a CSS Profile Account for Parent Use
• PDF for CSS Profile Waiver Request for the Noncustodial Parent
• Slide show on Reporting Parents on the CSS Profile
• Slide show on Completing the CSS Profile for the Noncustodial Parent

What is the Student Aid Index?

The 2025-26 FAFSA, or Free Application for Federal Student Aid, is the primary application for need-based financial aid for the 2025-26 academic year. A student and parent/s submit household and financial information. Based on this information, the FAFSA calculates the amount a family can pay for college in a given year, now called the Student Aid Index (SAI).

A college’s financial aid office uses the Student Aid Index in the simple equation below to determine a student’s eligibility for need-based financial aid given the college’s Cost of Attendance.

A student’s Financial Need is their eligibility for aid at a college. However, the rules governing Federal Student Aid plus each college’s policies on allocating their institutional need-based funds determine a college’s financial aid offer, which may or may not meet a student’s calculated Financial Need.

How is the Student Aid Index calculated?

Family size, parents’ marital status, state of residence, along with four primary financial inputs, determine the 2025-26 Student Aid Index.

1. Parent 2023 Income
2. Parent Assets on the filing date
3. Student 2023 Income
4. Student Assets on the filing date

One significant change is the number of students in college will no longer be used in the SAI formula.

1) Parent Income

The 2025-26 FAFSA relies on 2023 federal tax returns for all parent income, eliminating the reporting of non-taxed income not included on the federal tax returns. Notably, parents making pre-tax contributions to employer retirement plans will no longer count as part of parent income.

A first step determines whether a student qualifies for an SAI = $0 and the maximum Pell Grant. If the parent’s Adjusted Gross Income (AGI) is below a multiple of the Federal Poverty Level income for your state and family size, then the student’s SAI = $0. If the parent is not required to file federal tax returns in 2023, then the SAI = -$1,500. This step is incorporated as part of this calculator.

2) Parent Assets

The 2025-26 FAFSA will continue to include all assets a parent owns outside of 1) retirement accounts, 2) a primary home, and 3) life insurance policies. The assets counted as Net Worth include checking, savings, CDs, brokerage accounts, 529 or college savings plans only for the student applicant, and equity value of second properties.

Two additional categories will be counted as parent assets for the calculation of SAI.

1. Child support received. A parent reports all child support received in the calendar year prior to filing the FAFSA as an asset at the time of application. Child support received was previously reported as non-taxed income.
2. Net worth of business or farm. The net worth of a business or farm is the value of the business or farm minus any debt against that business or farm. A parent that is only a part owner would report their percentage of the overall net worth.

2) Student Income

The 2025-26 FAFSA provides income protection for a student equal to $11,400. In other words, there will be no expected contribution from student income if 2023 income is $11,400 or less. For every dollar over this amount, the contribution rate is 50%. Note, if a student qualifies for SAI = $0 based on their parent’s Adjusted Gross Income, then student income will not factor into the SAI calculation.

4) Student Assets

All assets held by a student outside of retirement are reported. These include checking, savings, CDs, and brokerage accounts for most students. 529 or college savings plans owned by the student are always reported as a parent asset. The contribution rate for student assets is 20% of every dollar. Again, if the student qualifies for SAI = $0 based on their parent’s Adjusted Gross Income, then any assets held by the student will not factor into the SAI calculation.

---

2025-26 FAFSA Student Aid Index Calculator

To calculate your Student Aid Index, you can use values from the parent’s and student’s 2023 tax returns and the current value of parent and student assets. Note: This calculator is for dependent students.

Students and parents applying for financial aid will complete a new, simpler FAFSA (Free Application for Federal Student Aid) for the 2024-25 academic year. The new FAFSA greatly reduces the number of questions and makes it easier for students and families to file.

Student Aid Index (SAI) will replace Expected Family Contribution (EFC) as the calculated amount a family is able to pay for a student’s college for a given year. Colleges will use SAI in place of EFC in the fundamental equation to determine need-based financial aid eligibility.

Cost of Attendance – Student Aid Index = Financial Need

Your financial need is the amount of need-based financial aid you would be eligible for.

Along with the new terminology, there are changes to how a family’s eligibility is calculated. Here are the five most important changes you need to be aware of and how they may impact you.

1) Elimination of the number of students in college

Change

The most discussed – and maligned – change is that the formula no longer divides Student Aid Index (SAI) by the number of students in college. Previously, the Expected Family Contribution (EFC) was calculated as a family’s ability to pay for all college costs for a single academic year. If there were multiple children in college, this EFC was then divided among those children so that each student was expected to pay a portion of the total EFC. Now, the SAI will be calculated equally for each student, except for differences in student income or assets reported between siblings.

Impact

Families with multiple children in college at the same time will see an increase in their SAI over previous years’ calculations, reducing their eligibility for financial aid.

2) Limits on income reported

Change

Income reported on the FAFSA will only come from federal tax returns. Parents (or students) will no longer be required to report untaxed or pre-tax income not captured by the tax return. Most notably, pre-tax contributions to employer retirement plans will not be counted. For student income, there is no longer the requirement to report money received or bills paid on their behalf by relatives or others. 

Impact

Parents who want to lower their SAI and increase aid eligibility and may now consider maximizing pre-tax employer retirement contributions to reduce the income reported on FAFSA.

Students can now receive money from relatives – grandparents and others – to help pay for college without that support having a negative impact on their future aid eligibility.

3) Child support now reported as an asset

Change

Child support will no longer be reported as untaxed income, but instead, the amount of child support received in the FAFSA tax year will be reported as a parent asset.

Impact

Divorced parents receiving child support may see an increase in their aid eligibility since the contribution rate to the Student Aid Index (SAI) from parent assets is much lower than from parent income.

4) Value of a family business or farm is reported as a parent asset

Change

The net worth of a family business or farm of any size will now be reported as a parent asset. The current EFC formula excludes this amount if the business or farm employs fewer than 100 full-time employees, which exempted most cases. Going forward, this change may impact more small business owners.

Impact

Families who report a value to their business or farm will see a higher Student Aid Index and a decrease in their aid eligibility. It’s important to note that the total value reported will not be counted as a parent asset, but only a portion. This 2024-25 chart details how this included amount will be calculated.

5) New rules to calculate an SAI equal to $0

Change

There are new thresholds for students to qualify for an SAI equal to $0 and receive the maximum Pell Grant. A parent’s Adjusted Gross Income (AGI) in the FAFSA tax year will be compared to a multiple of income for Federal Poverty Level for their marital status, family size and state of residence. If the parent’s AGI falls at or below this amount, then a student will be given a maximum SAI equal to $0 and awarded a full Pell Grant. Here is the 2024-25 chart with income thresholds by marital status and family size for the lower 48 states.

SAI can also be as low as -$1,500 as a measure of extreme need. Any student whose parent is not required to file a tax return will be given an SAI equal to -$1,500; however, there are other scenarios where a student’s SAI will be less than $0.

Impact

For families with high need, a better opportunity to receive an SAI equal $0 and the maximum Pell Grant. The new methodology is more generous and flexible than today’s “automatic $0 EFC” income threshold of $29,000 or less.

Why do you need an FSA ID?

Your Federal Student Aid ID, or FSA ID, is an identity-verified ID with the Department of Education. An FSA ID is required by each FAFSA contributor to:

1. Access the online FAFSA,
2. Provide consent to the IRS to share your Federal Tax Information with the Department of Education,
3. Electronically sign the FAFSA for submission.

You’ll use this same FSA ID to reapply for financial aid every year and manage the Federal Student Aid you may receive, such as Direct Federal Student Loans. Once created, your FSA ID will be your forever ID for all things related to the FASFA and Federal Student Aid.

You can create an FSA ID at: https://studentaid.gov/fsa-id/create-account/launch.

Who creates an FSA ID?

For a dependent student applying for financial aid, both the student and parent create their own FSA IDs. If the parent or student already has an FSA ID from prior applications, that FSA ID is used this year and every year.

Dependent student with married parents

If the dependent student’s biological or adoptive parents are married, here are the rules for which parents create an FSA ID for the FAFSA.

Dependent student with separated or divorced parents

If the dependent student’s biological or adoptive parents are separated or divorced and no longer live together, only the custodial parent is required to complete the FAFSA. However, if the divorced custodial parent is remarried, they must include their spouse on the application. Refer to rules on how to determine who is the custodial parent.

How do you create an FSA ID?

Go to: https://studentaid.gov/fsa-id/create-account/launch.

Watch this quick, 5-minute video to create your FSA ID.

This calculator is designed to help you explore the impact of colleges’ need-based financial aid policies on your financial aid offers and out-of-pocket cost.

To use this calculator, it’s important to understand two fundamental concepts in need-based financial aid: 1) demonstrated need and 2) percent of demonstrated need met.

What is Demonstrated Need?

Your demonstrated need is the amount of need-based financial aid you may be eligible for given to two factors:

1. A college’s cost of attendance.
2. Your Student Aid Index (SAI) as calculated by either FAFSA or CSS Profile.

Colleges that only require FAFSA use the FAFSA Student Aid Index (SAI) to measure a family’s ability to pay and determine the student’s eligibility for institutional need-based aid. Colleges that require the CSS Profile calculate a custom Student Aid Index (SAI) using that application to measure a family’s ability to pay and determine the student’s eligibility for institutional need-based aid.

Every college determines your demonstrated need, or financial aid eligibility, at their college using this fundamental equation:

So, your demonstrated need is the remaining money needed to pay for college after deducting your Student Aid Index, or the amount you are able to pay according to the respective financial aid application.

What is the Percent of Demonstrated Need Met?

While you may have a certain amount of demonstrated need at a college, this doesn’t necessarily mean that you will receive a financial aid package to equal that need. Many colleges don’t have the ability to provide a financial aid package that can meet a student’s full need. Luckily, colleges publish data on a yearly basis that tell you what percent of demonstrated need they meet on average. You can know ahead of time just how generous a college is with their need-based financial aid offers.

Let’s take an example. Butler University meets 70% of demonstrated need on average. If your FAFSA SAI is equal to $22,000, given their cost of attendance of $62,700, your demonstrated need is equal to $40,700 ($62,700 – $22,000). However, because, on average, Bulter offers a financial aid package that meets 70% of that need, you should expect a financial aid offer of about $28,500 (70% of $40,700). This leaves you with a gap in the financial aid offer of $12,200, which is an additional out-of-pocket cost beyond your Student Aid Index of $22,000.

It’s essential to understand which colleges “gap” your financial aid, and by how much, so that you can plan for these additional costs. You can use this calculator to explore colleges’ financial aid policies and their impact on your expected ability to pay.

IMPORTANT NOTICE:
This calculator has been updated as of February 1, 2024, to incorporate the adjustment for inflation to the Student Aid Index based on the Federal Student Aid’s Final SAI Guide released on January 30, 2024.

What is the Student Aid Index?

For the financial aid award year 2024-25, FAFSA (Free Application for Federal Student Aid) is making several changes to determine a dependent student’s aid eligibility, starting with the calculation of a family’s ability to pay for college.

The new Student Aid Index (SAI) will replace Expected Family Contribution (EFC) as the calculated amount a family is able to pay for college for a given year. Colleges will use SAI in place of EFC in the fundamental equation to determine need-based financial aid eligibility.

Cost of Attendance – Student Aid Index = Financial Need

Your financial need is the same as your need-based financial aid eligibility, but rules on federal student aid plus a college’s own institutional need-based financial aid policies determine your financial aid package.

How is the Student Aid Index calculated?

Your family size, parent’s marital status and state of residence, along with four primary financial inputs – 1) Parent 2022 Income, 2) Parent Assets as of filing date, 3) Student 2022 Income, 4) Student Assets as of filing date – will still determine your SAI, or family’s ability to pay. One significant change is the number of students in college will no longer be used in the SAI formula.

Parent Income

FAFSA will rely on 2022 federal tax returns for all parent income, eliminating the reporting of any non-taxed income not reported on your returns. Notably, for parents making pre-tax contributions to employer retirement plans, these contributions amount will no longer count as part of parent income. There will also be a first step to determine whether your student qualifies for an SAI = $0 and the maximum Pell Grant. If your Adjusted Gross Income (AGI) is below a multiple of the Federal Poverty Level income for your state and family size, then your student’s SAI = $0. And, if a parent is not required to file federal tax returns, then SAI = -$1,500. This step is incorporated as part of this calculator.

Parent Assets

FAFSA will continue to include all assets a parent owns outside of retirement accounts, a primary home, and life insurance policies. These include checking, savings, CDs, brokerage accounts, 529 or college savings plans, and equity value of second properties.

Two new amounts will be counted as parent assets for the calculation of SAI.

1. Child support received. A parent needs to report any child support received in 2022 as an asset at the time of application. It was previously reported as non-taxed income.
2. Net worth of business or farm. In prior-year applications, if your business or farm employed less than 100 full-time employees, you were not required to report its net worth. Going forward, the net worth of a business or farm of any size will be reported as a parent asset.

Student Income

FAFSA will provide income protection for students equal to $11,130. In other words, there will be no expected contribution from student income if 2022 is $11,130 or less. For every dollar over this amount, the contribution rate is 50%. Note, if the student qualifies for SAI = $0 based on their parent’s AGI, then any student earnings will not push the SAI over $0.

Student Assets

All assets held by the student outside of retirement are reported. These could include checking, savings, CDs, and brokerage accounts for most students. 529 or college savings plans owned by the student are always reported as a parent asset. The contribution rate for student assets is 20% of every dollar. Again, if the student qualifies for SAI = $0 based on their parent’s AGI, then any assets held by the student will not push the SAI over $0.

---

2024-25 Student Aid Index Calculator

IMPORTANT NOTICE:
This calculator has been updated as of February 1, 2024, to incorporate the adjustment for inflation to the Student Aid Index based on the Federal Student Aid’s Final SAI Guide released on January 30, 2024.

To calculate your Student Aid Index, you can use values from your parent’s 2022 tax returns and current value of parent and student assets.

FAFSA and CSS Profile have different rules on what needs to be reported in the investment lines of their applications. Use this calculator to get the correct total to report for each application.

NOTE: The new 2024-25 FAFSA rules for reporting 529 Plans require you to only report 529 Plan amounts for the student applicant. You should no longer include 529 Plans amounts for other members of the family.

For all amounts, report balances or values on the date of filing.

The FAFSA EFC Estimator gives you an estimate of your Expected Family Contribution (EFC) for colleges that use the Free Application for Federal Student Aid (FAFSA) to award need-based financial aid for the 2023-24 school year. This interactive tool is for a dependent student eligible to submit the FAFSA.

I created the FAFSA EFC Estimator so that in 3 steps you can understand if you may qualify for need-based financial aid. The easy-to-use inputs also allow you to run scenarios for changes in income or assets. Importantly, it will help you see how each area of your finances – income versus assets – impacts your EFC.

For a more detailed FAFSA EFC, or to calculate the EFC as determined by the CSS Profile, you can use College Board’s EFC Calculator.

*If Parent Taxed Income or AGI is less than $50,000, the EFC Estimator assumes the student qualifies for the Simplified Needs Test, which would exclude any assets you report on the FAFSA from the EFC calculation. To qualify for the Simplified Needs Test, you must meet additional criteria beyond an income below $50,000. You can review those criteria here.