I was playing around with a calculator for the new 20245-25 fafsa form. Students can now have a negative SAI. Can anyone tell me if there is much difference for a student if their SAI is $0 vs -$1500. How will that impact financial aid? Both numbers will make a student eligible for maximum Pell grant dollars. In our case, we have a farm so they want equity value of the farm. If your AGI is low enough you get a $0 SAI, but the equity in the business determines if it is 0 or a negative number. I’m trying to figure out how this new number will work.
I wasn’t aware there are any working SAI calculators, can you share a link?
This is the one I was using this morning. It’s pretty basic but covers the questions I had concerning AGI, farm equity (which I’m not sure how they expect us to determine this, who sets the land value), student income and student assets. I realize there are a lot of parts missing, but it gave me the information I was looking for. I’m just curious how schools will use a $0 SAI vs a negative one.
https://www.collegemoneymethod.com/2024-25-student-aid-index-sai-calculator/
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From a NASFAA Q&A about FAFSA Simplification:
What does the negative SAI do?
The negative SAI establishes a framework to allow the very neediest students to receive aid in excess of the Cost of Attendance (COA) established by their school. Even absent additional federal aid for students with negative SAIs, the negative figure could prove helpful by further differentiating the neediest students, whose EFCs are currently all clustered at zero because this is the lowest the EFC can go. This could allow states and institutions to more accurately target need-based aid, including the Federal Supplemental Educational Opportunity Grant (FSEOG).
In terms of awarding aid in excess of COA, the fact that aid “can” be awarded in excess of COA does not mean it will be. My guess is that this is intended to allow federal grant aid at very low cost schools (think community colleges) to exceed COA. If a school doesn’t meet need, this won’t change that. What it does do, as noted in the information above, is allow the school to differentiate between levels of “poor.” Schools only have a very limited amount of SEOG to award, and they may target more toward negative SAI students than to 0 EFC students.
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In terms of how to report the value of the farm, it will be done in the same manner as it currently is for investment farms:
Similarly, for a business or investment farm , the current net worth (the current market value minus the debt owed on it) is reported for land, buildings, machinery, equipment, livestock, and inventories. Business or farm debt means only those debts for which the business or farm was used as collateral.
Except current market value is a VERY subjective term. So my question still is who determines that value? How do you define it? Is it required to provide proof. For example if I base it off current farms sales in my area there could be a significant difference between the highest selling farm and the lowest. To the tune of hundreds of thousands of dollars.
It is always an expectation that the person completing the form and submitting it with their electronic signature is telling the truth. Sometimes a student’s FAFSA is flagged for verification, but investment/farm value is verified by submitting a signed form affirming the value. That said, if the amount looks unreasonable, a financial aid officer would be required to follow up - they would ask for some type of documentation of the value. I verified a lot of files over the years, and I never questioned reported amounts that didn’t appear ridiculously low. In the late 1980’s, I did have conversations with farm owners regarding their situations, and I found that all could provide an adequate explanation for what they reported (that was an especially difficult time for farmers in the Midwest).
In other words, it’s up to you to determine the value as best you can.
CSS Profile schools may dig deeper, but the FAFSA changes don’t make a difference to what they have been doing all along. They have typically been more (shall I say) curious about reported amounts, because they have a lot more institutional money to give to students. That’s not to say that they won’t accept the financial information provided to them, just that they often have amounts that they may expect to see & they will ask about what’s reported if it’s not in line with what they expect.
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Thank you. That is very interesting. So basically, if I can prove the value by showing a local sale value similar to what I report, that is considered proof. I guess these kinds of situations always concern me because outside of an official appraisal, this is a very subjective number that can really change the final value of the SAI. It will be interesting to see how aid disbursement changes between a $0 and a negative $1500 SAI
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The truth is, it may not make any difference. The Pell grant amount won’t change, and you may or may have received SEOG even at 0 EFC (caution: always meet financial aid deadlines, because being late can result in things like not getting SEOG that you might otherwise have received). It could possibly help in terms of institutional aid, but how depends on the school’s aid policies.
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It may make a difference at meet full need school, but most meet full need schools use CSS Profile not FAFSA to calculate the FA package. And, as we know, the vast majority of colleges do not meet full need.
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