FR Doc 2010-12799
[Federal Register: May 27, 2010 (Volume 75, Number 102)]
[Notices]
[Page 29744-29749]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27my10-47]
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DEPARTMENT OF EDUCATION
Federal Pell Grant, Federal Perkins Loan, Federal Work-Study,
Federal Supplemental Educational Opportunity Grant, William D. Ford
Federal Direct Loan, and TEACH Grant Programs
AGENCY: Federal Student Aid, U.S. Department of Education.
ACTION: Notice of revision of the Federal Need Analysis Methodology for
the 2011-2012 award year.
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SUMMARY: The Secretary announces the annual updates to the tables that
will be used in the statutory ``Federal Need Analysis Methodology'' to
determine a student's expected family contribution (EFC) for award year
2011-2012 for the student financial aid programs authorized under title
IV of the Higher Education Act of 1965, as amended (HEA). An EFC is the
amount a student and his or her family may reasonably be expected to
contribute toward the student's postsecondary educational costs for
purposes of determining financial aid eligibility. The Title IV
programs include the Federal Pell Grant, Federal Perkins Loan, Federal
Work-Study, Federal Supplemental Educational Opportunity Grant, William
D. Ford Federal Direct Loan, and the Teach Grant Programs (Title IV,
HEA Programs).
FOR FURTHER INFORMATION CONTACT: Ms. Marya Dennis, Management and
Program Analyst, U.S. Department of Education, room 63G2, Union Center
Plaza, 830 First Street, NE., Washington, DC 20202-5454. Telephone:
(202) 377-3385.
If you use a telecommunications device for the deaf (TDD), call the
Federal Relay Service (FRS), toll free, at 1-800-877-8339.
Individuals with disabilities can obtain this document in an
accessible format (e.g., braille, large print, audiotape, or computer
diskette) on request to the contact person listed under FOR FURTHER
INFORMATION CONTACT.
SUPPLEMENTARY INFORMATION: Part F of title IV of the HEA specifies the
criteria, data elements, calculations, and tables used in the Federal
Need Analysis Methodology EFC calculations.
Section 478 of part F of title IV of the HEA requires the Secretary
to adjust four of the tables--the Income Protection Allowance, the
Adjusted Net Worth of a Business or Farm, the Education Savings and
Asset Protection Allowance, and the Assessment Schedules and Rates--
each award year for general price inflation. The changes are based, in
general, upon increases in the Consumer Price Index.
For award year 2011-2012, the Secretary is charged with updating
the income protection allowance for parents of dependent students,
adjusted net worth of a business or farm, and the assessment schedules
and rates to account for inflation that took place between December
2009 and December 2010. However, because the Secretary must publish
these tables before December 2010, the increases in the tables must be
based upon a percentage equal to the estimated percentage increase in
the Consumer Price Index for All Urban Consumers (CPI-U) for 2010. The
Secretary must also account for any misestimation of inflation for the
prior year. In developing the table values for the 2010-2011 award
year, the Secretary assumed a 4.1 percent increase in the CPI-U for the
period December 2008 through December 2009. Actual inflation for this
time period was 2.7 percent. The Secretary estimates that the increase
in the CPI-U for the period December 2009 through December 2010 will be
1.2 percent. Last year's overestimate of inflation for 2009 (4.1
percent minus 2.7 percent) exceeds this year's estimate of inflation
for 2010. However, the Secretary lacks statutory authority to reduce
the table values in the need analysis formula. Thus, the income
protection allowance for parents of dependent students, the adjusted
net worth of a business or farm, and the assessment schedules and rates
are unchanged from 2010-2011. Additionally, section 601 of the College
Cost Reduction and Access Act of 2007 (CCRAA, Pub. L. 110-84) amended
sections 475 through 478 of the HEA by updating the procedures for
determining the income protection allowance for dependent students as
well as the income protection allowance tables for both independent
students with dependents other than a spouse and
[[Page 29745]]
independent students without dependents other than a spouse. As amended
by the CCRAA, the HEA established new 2011-2012 award year values for
these income protection allowances. The updated tables are in sections
1, 2, and 4 of this notice.
The Secretary must also revise, for each award year, the education
savings and asset protection allowances as provided for in section
478(d) of the HEA. The Education Savings and Asset Protection Allowance
table for award year 2011-2012 has been updated in section 3 of this
notice. Section 478(h) of the HEA also requires the Secretary to
increase the amount specified for the Employment Expense Allowance,
adjusted for inflation. This calculation is based upon increases in the
Bureau of Labor Statistics budget of the marginal costs for a two-
worker family compared to a one-worker family for food away from home,
apparel, transportation, and household furnishings and operations. The
Employment Expense Allowance table for award year 2011-2012 has been
updated in section 5 of this notice.
The HEA provides for the following annual updates:
1. Income Protection Allowance (IPA). This allowance is the amount
of living expenses associated with the maintenance of an individual or
family that may be offset against the family's income. It varies by
family size. The IPA for the dependent student is $5,250. The IPAs for
parents of dependent students for award year 2011-2012 are:
Parents of Dependent Students
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Number in college
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Family size 1 2 3 4 5
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2............................................................. $16,230 $13,450 ................ ................ ................
3............................................................. 20,210 17,450 $14,670 ................ ................
4............................................................. 24,970 22,190 19,430 $16,650 ................
5............................................................. 29,460 26,680 23,920 21,140 $18,380
6............................................................. 34,460 31,680 28,920 26,140 23,380
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For each additional family member add $3,890.
For each additional college student subtract $2,760.
The IPAs for independent students with dependents other than a
spouse for award year 2011-12 are:
Independent Students With Dependents Other Than a Spouse
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Number in college
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Family size 1 2 3 4 5
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2............................................................. $21,660 $17,960 ................ ................ ................
3............................................................. 26,960 23,280 $19,580 ................ ................
4............................................................. 33,300 29,600 25,920 $22,210 ................
5............................................................. 39,300 35,590 31,900 28,200 $24,520
6............................................................. 45,950 42,250 38,580 34,860 31,190
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For each additional family member add $5,180.
For each additional college student subtract $3,690.
The IPAs for single independent students and independent students
without dependents other than a spouse for award year 2011-12 are:
------------------------------------------------------------------------
Number in
Marital status college IPA
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Single........................................ 1 $8,550
Married....................................... 2 8,550
Married....................................... 1 13,710
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2. Adjusted Net Worth (NW) of a Business or Farm. A portion of the
full net value of a business or farm is excluded from the calculation
of an expected contribution because--(1) The income produced from these
assets is already assessed in another part of the formula; and (2) the
formula protects a portion of the value of the assets. The portion of
these assets included in the contribution calculation is computed
according to the following schedule. This schedule is used for parents
of dependent students, independent students without dependents other
than a spouse, and independent students with dependents other than a
spouse.
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If the net worth of a business or farm is-- Then the adjusted net worth (NW) is--
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Less than $1................................ $0.
$1 to $115,000.............................. $0 + 40% of NW.
$115,001 to $345,000........................ $46,000 + 50% of NW over $115,000.
$345,001 to $580,000........................ $161,000 + 60% of NW over $345,000.
$580,001 or more............................ $302,000 + 100% of NW over $580,000.
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3. Education Savings and Asset Protection Allowance. This allowance
protects a portion of net worth (assets less debts) from being
considered available for postsecondary educational expenses. There are
three asset protection allowance tables--one for parents of dependent
students, one for independent students without dependents other than a
spouse, and one for independent students with dependents other than a
spouse.
[[Page 29746]]
Dependent Students
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And they are
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Married Single
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If the age of the older parent is Then the education savings and asset protection allowance
is--
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25 or less.......................................... 0 0
26.................................................. 2,500 900
27.................................................. 5,100 1,800
28.................................................. 7,600 2,700
29.................................................. 10,200 3,500
30.................................................. 12,700 4,400
31.................................................. 15,300 5,300
32.................................................. 17,800 6,200
33.................................................. 20,400 7,100
34.................................................. 22,900 8,000
35.................................................. 25,500 8,900
36.................................................. 28,000 9,800
37.................................................. 30,600 10,600
38.................................................. 33,100 11,500
39.................................................. 35,700 12,400
40.................................................. 38,200 13,300
41.................................................. 38,900 13,600
42.................................................. 39,900 13,900
43.................................................. 40,900 14,200
44.................................................. 41,900 14,500
45.................................................. 42,900 14,900
46.................................................. 44,000 15,200
47.................................................. 45,100 15,500
48.................................................. 46,200 15,900
49.................................................. 47,400 16,300
50.................................................. 48,800 16,700
51.................................................. 50,000 17,100
52.................................................. 51,200 17,500
53.................................................. 52,800 18,000
54.................................................. 54,300 18,400
55.................................................. 55,600 18,800
56.................................................. 57,300 19,300
57.................................................. 58,700 19,800
58.................................................. 60,400 20,300
59.................................................. 62,200 20,800
60.................................................. 64,000 21,400
61.................................................. 65,800 22,000
62.................................................. 67,700 22,600
63.................................................. 70,000 23,200
64.................................................. 72,000 23,800
65 or older......................................... 74,000 24,500
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Independent Students Without Dependents Other Than a Spouse
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And they are
-----------------------------------------------------------
Married Single
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If the age of the student is Then the education savings and asset protection allowance
is--
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25 or less.......................................... 0 0
26.................................................. 2,500 900
27.................................................. 5,100 1,800
28.................................................. 7,600 2,700
29.................................................. 10,200 3,500
30.................................................. 12,700 4,400
31.................................................. 15,300 5,300
32.................................................. 17,800 6,200
33.................................................. 20,400 7,100
34.................................................. 22,900 8,000
35.................................................. 25,500 8,900
36.................................................. 28,000 9,800
37.................................................. 30,600 10,600
38.................................................. 33,100 11,500
39.................................................. 35,700 12,400
40.................................................. 38,200 13,300
41.................................................. 38,900 13,600
42.................................................. 39,900 13,900
[[Page 29747]]
43.................................................. 40,900 14,200
44.................................................. 41,900 14,500
45.................................................. 42,900 14,900
46.................................................. 44,000 15,200
47.................................................. 45,100 15,500
48.................................................. 46,200 15,900
49.................................................. 47,400 16,300
50.................................................. 48,800 16,700
51.................................................. 50,000 17,100
52.................................................. 51,200 17,500
53.................................................. 52,800 18,000
54.................................................. 54,300 18,400
55.................................................. 55,600 18,800
56.................................................. 57,300 19,300
57.................................................. 58,700 19,800
58.................................................. 60,400 20,300
59.................................................. 62,200 20,800
60.................................................. 64,000 21,400
61.................................................. 65,800 22,000
62.................................................. 67,700 22,600
63.................................................. 70,000 23,200
64.................................................. 72,000 23,800
65 or older......................................... 74,000 24,500
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Independent Students With Dependents Other Than a Spouse
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And they are
-----------------------------------------------------------
Married Single
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If the age of the student is Then the education savings and asset protection allowance
is--
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25 or less.......................................... 0 0
26.................................................. 2,500 900
27.................................................. 5,100 1,800
28.................................................. 7,600 2,700
29.................................................. 10,200 3,500
30.................................................. 12,700 4,400
31.................................................. 15,300 5,300
32.................................................. 17,800 6,200
33.................................................. 20,400 7,100
34.................................................. 22,900 8,000
35.................................................. 25,500 8,900
36.................................................. 28,000 9,800
37.................................................. 30,600 10,600
38.................................................. 33,100 11,500
39.................................................. 35,700 12,400
40.................................................. 38,200 13,300
41.................................................. 38,900 13,600
42.................................................. 39,900 13,900
43.................................................. 40,900 14,200
44.................................................. 41,900 14,500
45.................................................. 42,900 14,900
46.................................................. 44,000 15,200
47.................................................. 45,100 15,500
48.................................................. 46,200 15,900
49.................................................. 47,400 16,300
50.................................................. 48,800 16,700
51.................................................. 50,000 17,100
52.................................................. 51,200 17,500
53.................................................. 52,800 18,000
54.................................................. 54,300 18,400
55.................................................. 55,600 18,800
56.................................................. 57,300 19,300
57.................................................. 58,700 19,800
58.................................................. 60,400 20,300
59.................................................. 62,200 20,800
[[Page 29748]]
60.................................................. 64,000 21,400
61.................................................. 65,800 22,000
62.................................................. 67,700 22,600
63.................................................. 70,000 23,200
64.................................................. 72,000 23,800
65 or older......................................... 74,000 24,500
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4. Assessment Schedules and Rates. Two schedules that are subject
to updates, one for parents of dependent students and one for
independent students with dependents other than a spouse, are used to
determine the EFC toward educational expenses from family financial
resources. For dependent students, the EFC is derived from an
assessment of the parents' adjusted available income (AAI). For
independent students with dependents other than a spouse, the EFC is
derived from an assessment of the family's AAI. The AAI represents a
measure of a family's financial strength, which considers both income
and assets.
The parents' contribution for a dependent student is computed
according to the following schedule:
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If AAI is-- Then the contribution is--
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Less than -$3,409........................... -$750.
($3,409) to $14,500......................... 22% of AAI.
$14,501 to $18,200.......................... $3,190 + 25% of AAI over $14,500.
$18,201 to $21,900.......................... $4,115 + 29% of AAI over $18,200.
$21,901 to $25,600.......................... $5,188 + 34% of AAI over $21,900.
$25,601 to $29,300.......................... $6,446 + 40% of AAI over $25,600.
$29,301 or more............................. $7,926 + 47% of AAI over $29,300.
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The contribution for an independent student with dependents other
than a spouse is computed according to the following schedule:
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If AAI is-- Then the contribution is--
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Less than -$3,409........................... -$750.
($3,409) to $14,500......................... 22% of AAI.
$14,501 to $18,200.......................... $3,190 + 25% of AAI over $14,500.
$18,201 to $21,900.......................... $4,115 + 29% of AAI over $18,200.
$21,901 to $25,600.......................... $5,188 + 34% of AAI over $21,900.
$25,601 to $29,300.......................... $6,446 + 40% of AAI over $25,600.
$29,301 or more............................. $7,926 + 47% of AAI over $29,300.
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5. Employment Expense Allowance. This allowance for employment-
related expenses, which is used for the parents of dependent students
and for married independent students, recognizes additional expenses
incurred by working spouses and single-parent households. The allowance
is based upon the marginal differences in costs for a two-worker family
compared to a one-worker family for food away from home, apparel,
transportation, and household furnishings and operations.
The employment expense allowance for parents of dependent students,
married independent students without dependents other than a spouse,
and independent students with dependents other than a spouse is the
lesser of $3,500 or 35 percent of earned income.
6. Allowance for State and Other Taxes. The allowance for State and
other taxes protects a portion of the parents' and students' income
from being considered available for postsecondary educational expenses.
There are four categories for State and other taxes, one each for
parents of dependent students, independent students with dependents
other than a spouse, dependent students, and independent students
without dependents other than a spouse. Section 478(g) of the HEA
directs the Secretary to update the tables for State and other taxes
after reviewing the Statistics of Income file data maintained by the
Internal Revenue Service.
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Parents of dependents and independents with Dependents and
dependents other than a spouse independents without
-------------------------------------------------- dependents other than a
State spouse
Under $15,000 (in $15,000 & Up (in ------------------------
percent) percent) All (in percent)
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Alabama.............................. 3 2 2
[[Page 29749]]
Alaska............................... 2 1 0
Arizona.............................. 5 4 3
Arkansas............................. 4 3 3
California........................... 8 7 5
Colorado............................. 5 4 3
Connecticut.......................... 7 6 4
Delaware............................. 5 4 3
District of Columbia................. 7 6 6
Florida.............................. 4 3 1
Georgia.............................. 6 5 4
Hawaii............................... 4 3 4
Idaho................................ 5 4 4
Illinois............................. 6 5 2
Indiana.............................. 4 3 3
Iowa................................. 5 4 3
Kansas............................... 5 4 3
Kentucky............................. 5 4 4
Louisiana............................ 3 2 2
Maine................................ 6 5 4
Maryland............................. 8 7 6
Massachusetts........................ 6 5 4
Michigan............................. 5 4 3
Minnesota............................ 6 5 4
Mississippi.......................... 3 2 2
Missouri............................. 5 4 3
Montana.............................. 5 4 3
Nebraska............................. 5 4 3
Nevada............................... 4 3 1
New Hampshire........................ 5 4 1
New Jersey........................... 10 9 5
New Mexico........................... 3 2 2
New York............................. 9 8 6
North Carolina....................... 6 5 4
North Dakota......................... 3 2 1
Ohio................................. 6 5 4
Oklahoma............................. 4 3 3
Oregon............................... 8 7 5
Pennsylvania......................... 5 4 3
Rhode Island......................... 7 6 4
South Carolina....................... 5 4 3
South Dakota......................... 2 1 1
Tennessee............................ 2 1 1
Texas................................ 3 2 1
Utah................................. 5 4 4
Vermont.............................. 6 5 3
Virginia............................. 6 5 4
Washington........................... 4 3 1
West Virginia........................ 3 2 2
Wisconsin............................ 7 6 4
Wyoming.............................. 2 1 1
Other................................ 3 2 2
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Note: The official version of this document is the document
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Regulations is available on GPO Access at:
http://www.gpoaccess.gov/nara/index.html.
(Catalog of Federal Domestic Assistance Numbers: 84.063 Federal Pell
Grant Program; 84.038 Federal Perkins Loan Program; 84.033 Federal
Work-Study Programs; 84.007 Federal Supplemental Educational
Opportunity Grant Program; 84.268 William D. Ford Federal Direct
Loan Program; 84.379 TEACH Grant Program)
Program Authority: 20 U.S.C. 1087rr.
Dated: May 24, 2010.
William J. Taggart,
Chief Operating Officer, Federal Student Aid.
[FR Doc. 2010-12799 Filed 5-26-10; 8:45 am]
BILLING CODE 4000-01-P