The Student Aid Index (SAI) and FAFSA: The college cost homestretch

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Lowering the cost of attendance with financial aid? That’s worth celebrating.

© Nay Ni Ratn Mak Can Thuk—EyeEm/Getty Images

As you prepare for the high school homestretch, figuring out how to pay for college is perhaps the biggest thing to nail down. You’ve heard of the dream school, safety school, and that “reach” school that might push the acceptance boundary given your test scores, class rank, and other admission criteria.

But what about the best value school, or the lowest cost of attendance (COA) school? And maybe a “financial reach” school with a high sticker price but also a potential tuition discount?

To decide what you can afford, you need to fill out your Free Application for Federal Student Aid—the FAFSA. The FAFSA determines your Student Aid Index (SAI) and can even tell you which state and school grants and scholarships you’re eligible for. Here’s what you need to know about the FAFSA and paying for college.

The FAFSA is a standard application used by the federal government—and potential colleges—to determine your financial aid package. The information you provide on your FAFSA includes:

Once you fill out the FAFSA, the government uses a formula to calculate your SAI, which reflects how much the government thinks your family can put toward your total cost of attendance (COA) at college.

Your FAFSA information is sent to the schools you choose on your application. Once the schools have this information, they put together your financial aid package.

In addition to the FAFSA, you might fill out a CSS Profile if you’ve applied to schools that use it. The CSS Profile is a general application that can qualify you for merit-based scholarships and other financial aid at participating schools.

The profile charges a small fee, but it’s waived for families who make less than $100,000 per year. When you fill out this application, it’s sent to schools to help determine what additional scholarships—both merit-based and need-based—you qualify for.

When combined with the FAFSA, the CSS Profile can help you get a more complete financial aid package.

After you’ve been accepted and your financial aid forms have been reviewed, schools will inform you of your individualized financial aid packages. You’ll receive different offers from each school based on the aid you qualify for. Some schools use both the FAFSA and the CSS Profile to determine your total financial aid picture.

Those important financial aid letters will offer various ways to help cover your COA, such as:

Your financial aid letter will also include information about the total COA—including tuition, room and board, books, equipment, fees, and other estimated costs. This will help you determine whether you still need to come up with funding beyond your financial aid.

Compare your financial aid offers to decide what makes the most sense for your situation. Depending on what’s available, your aid letters can help you choose a state school versus private school, or whether to start at a community college. You can also try to leverage an offer from another college to get a better deal from your first choice.

Sending your FAFSA and CSS Profile information to as many schools as possible provides you with more options to choose from—and a chance to negotiate. Compare financial aid offers and look at your remaining costs.

All this information will help you choose a school that you can afford, based on whether you get grants, scholarships, and/or loans. Consider how much debt you can handle if you need loans to help bridge a college funding gap. In some cases, you might have to start at a lower-priced school to make attendance practical and affordable.

If you need additional funding sources to attend the college that’s right for you, there are options:

In recent years, loan forgiveness has emerged as a hot social and political issue. Although there’s much disagreement about society’s responsibility to help borrowers, there’s one area where we should all agree: College students and parents should put “value” at or near the top of college selection criteria. Not necessarily the cheapest option, but the one with the best blend of fit, prestige, career-boosting potential, and practical affordability.

How you pay for college is up to you. Sometimes it makes sense to dial back your expectations to avoid crushing student loan debt. Consider all your options carefully and make sure you fill out the FAFSA as soon as possible so you know what’s available to you. Applications may be submitted starting October 1 for the following award year.

And because things change from year to year—your family’s income level, the amount of aid available, and the costs of college—you need to fill out a new FAFSA each year you plan to attend college.