Need-based programs mean that your eligibility for the program is determined, at least in part, by your income. Many of the most common and impactful financial aid programs are need-based, such as the Pell Grant.
Your eligibility for need-based programs is calculated using your Student Aid Index (SAI), which is a number that the government calculates using your FAFSA data. It represents a student’s ability to pay for college. In general, the more money you and/or your contributors make, the higher your SAI will be.
If your SAI is above a certain threshold, you will no longer be eligible for need-based financial aid programs. The exact threshold changes from year to year and is based on the financial aid program in question, the student’s Cost Of Attendance (COA), and other factors.