Family Contribution

THE SUM YOU’RE expected to pay toward college costs is reflected in a number known as the Student Aid Index, or SAI, which replaces the old “expected family contribution” beginning with the 2024-25 academic year. Many parents are shocked by how much they’re expected to cough up each year toward college costs. You can get a handle on your family’s expected contribution using the quiz at CollegeBoard.org.

Let’s say your family is expected to pony up $15,000 a year. If your teenager goes to a college that costs $20,000, you should receive $5,000 a year in financial aid. What if your kid goes to a $50,000-a-year college? You should receive $35,000 in aid.

That suggests you shouldn’t dissuade your children from applying to colleges because they appear to be too expensive. Sure, if a college costs less than your expected family contribution, your out-of-pocket cost will be less. But if your teenager is choosing between two colleges, one that costs $2,000 more than your family’s expected contribution and another college that costs $20,000 more, you should—in theory—be indifferent, because your out-of-pocket cost will be the same.

In practice, a lot will depend on the composition of the aid package. If the more expensive college offers an aid package that includes a substantial amount of student loans, you may want to favor the less costly college rather than send your children out into the world burdened by debt. In addition, not all colleges offer aid packages that fill the full gap between your family’s contribution and the college’s cost, and that could leave you scrambling to make up the shortfall.

Next: Aid Eligibility

Previous: Financial Aid