Student9s	Contribution	From	Assets
The	full	formula	uses	the	student9s	assets	and	determines	a	<contribution	from	assets.=
First,	the	student9s	net	worth	is	calculated	by	adding	the	following	assets	reported	on	the	FAFSA	form.
Cash,	savings,	checking,	time	deposits,	and	money	market	funds.	Use	the	amount	reported	on	the	FAFSA
form.
Net	worth	of	investments.	Includes	real	estate	(excluding	primary	residence),	vacation	homes,	income	producing
property,	trusts,	stocks,	bonds,	derivatives,	securities,	mutual	funds,	tax	shelters,	and	qualified	education	benefits.
Adjusted	net	worth	of	business	and/or	farm.	Use	<Table	A3:	Business/Farm	Net	Worth	Adjustment=	in	the	2025-
26	Student	Aid	Index	(SAI)	and	Pell	Grant	Eligibility	Guide	to	adjust	the	total	reported	on	the	FAFSA	form.
Second,	the	student9s	net	worth	is	multiplied	by	the	conversion	rate	of	20%	to	get	the	student9s	contribution	from
assets.	If	the	contribution	from	assets	is	negative,	it	is	set	to	zero.
SAI	Calculation	3	Dependent	Student
The	student9s	SAI	is	determined	by	adding	the	parents9	contribution,	the	student9s	contribution	from	available	income,
and	the	student9s	contribution	from	assets.	The	SAI	may	be	negative	(but	not	less	than	-1,500).
Formula	B4Independent	Student	Without	Dependents	Other	Than	a
Spouse
The	SAI	for	an	independent	student	without	dependents	other	than	a	spouse	is	calculated	using	FAFSA	data	for	the
student	and	spouse.	The	FPS	calculates	a	contribution	from	available	income	and	a	contribution	from	assets;	the	SAI	is	the
sum	of	these	two	values.
Contribution	From	Available	Income
Student9s	(and	Spouse9s)	available	income.	The	student9s	(and	spouse9s)	available	income	is	calculated	by
subtracting	certain	allowances	from	the	student9s	(and	spouse9s)	total	income.	These	allowances	account	for	certain
nondiscretionary	expenses,	such	as	taxes	and	basic	living	expenses.	Once	a	minimum	level	of	support	has	been	offset	for
those	expenses,	the	formula	assumes	that	the	remaining	income	is	available	for	discretionary	purposes,	including	paying
for	a	postsecondary	education.	The	available	income	can	be	a	negative	number.
The	student9s	(and	spouse9s)	available	income	is	the	sum	of	the	taxable	and	untaxed	income	minus	amounts	reported	in
the	income	but	excluded	from	the	formula	(offsets	and	allowances).
Student9s	(and	spouse9s)	taxed/untaxed	income.	The	sum	of	the	following	items,	reported	on	a	U.S.	tax	return,	is	the
student9s	(and	spouse9s)	total	income:
Student9s	(and	spouse9s)	AGI
Student9s	(and	spouse9s)	deductible	payments	to	self-employed	SEP,	SIMPLE,	Keogh,	and	other	qualified	retirement
accounts
Student9s	(and	spouse9s)	tax-exempt	interest
Student9s	(and	spouse9s)	untaxed	IRA/pension	distributions	(excluding	rollovers)
Student9s	(and	spouse9s)	foreign	income	exclusion
Student9s	(and	spouse9s)	income	offsets.	The	sum	of	the	following	items	decreases	the	student9s	(and	spouse9s)	total
income:
Student9s	(and	spouse9s)	taxable	college	grant	and	scholarship	aid	(included	as	income).	This	amount	is
self-reported	on	the	FAFSA	form.
Student9s	(and	spouse9s)	education	credits.	Use	the	amount	reported	on	the	FAFSA	form.
Student9s	(and	spouse9s)	Federal	Work-Study	(FWS).	Schools	annually	report	FWS	earnings	by	individual
earners	to	the	Department.	ED	will	then	use	this	information	to	report	FWS	on	the	individual	earner9s	FAFSA	form.