Student9s	(and	spouse9s)	income	allowances.	The	sum	of	the	following	allowances	reduces	the	student9s	(and
spouse9s)	total	income:
U.S.	income	tax	paid.	Use	the	amount	reported	on	the	FAFSA	form.
Student9s	(and	spouse9s)	payroll	tax	allowance.	Use	<Table	B1:	Payroll	Tax	Allowance=	in	the	2025-26	Student
Aid	Index	(SAI)	and	Pell	Grant	Eligibility	Guide.	Apply	the	rates	shown	in	each	step	of	the	table	to	the	total	income
earned	from	work	in	2023	for	the	student	(and	spouse)	as	reported	on	the	FAFSA	form.	The	total	allowance	for
payroll	taxes	is	never	less	than	zero.
Income	protection	allowance.	This	amount	differs	for	unmarried	students	(single,	separated,	divorced,	or
widowed)	and	married	students	(married	or	remarried).	See	the	2025-26	Student	Aid	Index	(SAI)	and	Pell	Grant
Eligibility	Guide	for	the	current	year	allowance	amount.
Employment	expense	allowance.	If	the	student	is	not	married	(single,	separated,	divorced,	or	widowed)	this
allowance	is	$0.	If	the	student	is	married	(or	remarried),	this	allowance	is	35%	of	the	student	and	spouse9s	combined
earned	income	or	maximum	allowance,	whichever	is	less.	The	allowance	is	updated	annually.	See	the	2025-26
Student	Aid	Index	(SAI)	and	Pell	Grant	Eligibility	Guide	for	the	current	year	allowance	amount.	The	employment
expense	allowance	is	never	less	than	zero.
Finally,	the	student9s	(and	spouse9s)	available	income	is	multiplied	by	the	assessment	rate	of	50%	to	determine	the
student9s	contribution	from	income,	which	may	be	a	negative	number.
Student9s	(and	Spouse9s)	Contribution	From	Assets
The	full	formula	uses	the	student9s	(and	spouse9s)	assets	of	the	and	determines	a	<contribution	from	assets.=
First,	the	student9s	(and	spouse9s)	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	investment	farm.	Use	<Table	B2:	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	(and	spouse9s)	discretionary	net	worth	is	calculated	by	subtracting	the	asset	protection
allowance	(<Table	B3:	Asset	Protection	Allowance=	in	the	2025-26	Student	Aid	Index	(SAI)	and	Pell	Grant	Eligibility	Guide)
from	the	student9s	(and	spouse9s)	net	worth.
Finally,	the	student9s	(and	spouse9s)	net	worth	is	multiplied	by	the	conversion	rate	of	20%	to	determine	the	student9s
contribution	from	assets.	If	the	contribution	from	assets	is	negative,	it	is	set	to	zero.
SAI	Calculation	3	Independent	Student	Without	Depen dents	Other	Than	a
Spouse
The	student9s	SAI	is	determined	by	adding	the	student9s	contribution	from	income	and	the	student9s	contribution	from
assets.	The	SAI	may	be	negative	(but	not	less	than	-1,500).
Formula	C4Independent	Student	With	Dependents	Other	Than	a	Spouse
The	SAI	for	an	independent	student	with	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	Fom	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
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