74 Fed. Reg. 26379 (Jun. 2, 2009)

Federal Pell Grant, Academic Competitiveness Grant, National Science and Mathematics Access To Retain Talent Grant, Federal Perkins Loan, Federal Work-Study, Federal Supplemental Educational Opportunity Grant, Federal Family Education Loan, and William D. Ford Federal Direct Loan Programs

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Federal RegisterJun 2, 2009

74 Fed. Reg. 26379 (Jun. 2, 2009)

AGENCY:

Federal Student Aid, U.S. Department of Education.

ACTION:

Notice of revision of the Federal Need Analysis Methodology for the 2010-2011 award year.

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 2010-2011 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, Academic Competitiveness Grant, National Science and Mathematics Access to Retain Talent Grant, Federal Perkins Loan, Federal Work-Study, Federal Supplemental Educational Opportunity Grant, Federal Family Education Loan, and William D. Ford Federal Direct Loan Programs (Title IV, HEA Programs).

FOR FURTHER INFORMATION CONTACT:

Ms. Marya Dennis, Management and Program Analyst, U.S. Department of Education, 63G2, Union Center Plaza, 830 First Street, NE., Washington, DC 20202. 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 compact disk) 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 2010-2011 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 2008 and December 2009. However, because the Secretary must publish these tables before December 2009, 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 for 2009. The Secretary estimates that the increase in the Consumer Price Index for All Urban Consumers (CPI-U) for the period December 2008 through December 2009 will be 4.1 percent. 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 independent students without dependents other than a spouse. As amended by the CCRAA, the HEA established new 2010-2011 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 2010-2011 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 2010-2011 has been updated in section 5 of this notice.

The HEA provides for the following annual updates:

1. Income Protection Allowance. 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 income protection allowance for the dependent student is $4,500. The income protection allowances for parents of dependent students for award year 2010-2011 are:

Parents of Dependent Students

[Number in college]

Family Size	1	2	3	4	5
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

For each additional family member add $3,890.

For each additional college student subtract $2,760.

The income protection allowances (IPA) for independent students with dependents other than a spouse for award year 2010-11 are:

Independent Students With Dependents Other Than a Spouse

[Number in college]

Family size	1	2	3	4	5
2	$19,690	$16,330
3	24,510	21,160	$17,800
4	30,280	26,910	23,560	$20,190
5	35,730	32,350	29,000	25,640	$22,290
6	41,780	38,410	35,080	31,690	28,350

For each additional family member add $4,710.

For each additional college student subtract $3,350.

The income protection allowances for single independent students and independent students without dependents other than a spouse for award year 2010-11 are:

Marital status	Number in college	IPA
Single	1	$7,780
Married	2	7,780
Married	1	12,460

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.

If the net worth of a business or farm is—	Then the adjusted net worth is—
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.

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.

Dependent Students

If the age of the older parent is	And they are
Married	Single
	Then the education savings and asset protection allowance is—
25 or less	0	0
26	2,800	1,100
27	5,500	2,200
28	8,300	3,300
29	11,100	4,400
30	13,800	5,500
31	16,600	6,600
32	19,400	7,700
33	22,100	8,700
34	24,900	9,800
35	27,700	10,900
36	30,400	12,000
37	33,200	13,100
38	36,000	14,200
39	38,700	15,300
40	41,500	16,400
41	42,200	16,700
42	43,300	17,100
43	44,400	17,500
44	45,500	17,900
45	46,600	18,300
46	47,700	18,700
47	48,900	19,100
48	50,100	19,600

49	51,300	20,100
50	52,900	20,500
51	54,200	21,000
52	55,500	21,500
53	57,100	22,000
54	58,500	22,600
55	60,200	23,200
56	62,000	23,700
57	63,500	24,300
58	65,300	25,000
59	67,200	25,600
60	69,200	26,300
61	71,200	27,000
62	73,200	27,800
63	75,600	28,500
64	77,700	29,300
65 or older	80,300	30,100

Independent Students Without Dependents Other Than a Spouse

If the age of the student is	And they are
Married	Single
	Then the education savings and asset protection allowance is—
25 or less	0	0
26	2,800	1,100
27	5,500	2,200
28	8,300	3,300
29	11,100	4,400
30	13,800	5,500
31	16,600	6,600
32	19,400	7,700
33	22,100	8,700
34	24,900	9,800
35	27,700	10,900
36	30,400	12,000
37	33,200	13,100
38	36,000	14,200
39	38,700	15,300
40	41,500	16,400
41	42,200	16,700
42	43,300	17,100
43	44,400	17,500
44	45,500	17,900
45	46,600	18,300
46	47,700	18,700
47	48,900	19,100
48	50,100	19,600
49	51,300	20,100
50	52,900	20,500
51	54,200	21,000
52	55,500	21,500
53	57,100	22,000
54	58,500	22,600
55	60,200	23,200
56	62,000	23,700
57	63,500	24,300
58	65,300	25,000
59	67,200	25,600
60	69,200	26,300
61	71,200	27,000
62	73,200	27,800
63	75,600	28,500
64	77,700	29,300
65 or older	80,300	30,100

Independent Students With Dependents Other Than a Spouse

If the age of the student is	And they are
Married	Single
	Then the education savings and asset protection allowance is—
25 or less	0	0
26	2,800	1,100
27	5,500	2,200
28	8,300	3,300
29	11,100	4,400
30	13,800	5,500
31	16,600	6,600
32	19,400	7,700
33	22,100	8,700
34	24,900	9,800
35	27,700	10,900
36	30,400	12,000
37	33,200	13,100
38	36,000	14,200
39	38,700	15,300
40	41,500	16,400
41	42,200	16,700
42	43,300	17,100
43	44,400	17,500
44	45,500	17,900
45	46,600	18,300
46	47,700	18,700
47	48,900	19,100
48	50,100	19,600
49	51,300	20,100
50	52,900	20,500
51	54,200	21,000
52	55,500	21,500
53	57,100	22,000
54	58,500	22,600
55	60,200	23,200
56	62,000	23,700
57	63,500	24,300
58	65,300	25,000
59	67,200	25,600
60	69,200	26,300
61	71,200	27,000
62	73,200	27,800
63	75,600	28,500
64	77,700	29,300
65 or older	80,300	30,100

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:

If AAI is—	Then the contribution is—
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.

The contribution for an independent student with dependents other than a spouse is computed according to the following schedule:

If AAI is—	Then the contribution is—
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.

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.

State	Parents of dependents and independents with dependents other than a spouse	Dependents and independents without dependents other than a spouse
Under $15,000	$15,000 & up	All
Alabama	3%	2%	2%
Alaska	2%	1%	0%
Arizona	4%	3%	3%
Arkansas	4%	3%	3%
California	9%	8%	5%
Colorado	5%	4%	3%
Connecticut	8%	7%	4%
Delaware	5%	4%	3%
District of Columbia	7%	6%	6%
Florida	4%	3%	1%
Georgia	5%	4%	4%
Hawaii	5%	4%	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%	5%
Massachusetts	7%	6%	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	3%	2%	1%
New Hampshire	5%	4%	1%
New Jersey	9%	8%	4%
New Mexico	3%	2%	2%
New York	10%	9%	6%
North Carolina	6%	5%	4%
North Dakota	3%	2%	1%
Ohio	6%	5%	4%
Oklahoma	4%	3%	3%
Oregon	7%	6%	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	7%	6%	4%
Washington	3%	2%	1%
West Virginia	3%	2%	2%
Wisconsin	7%	6%	4%
Wyoming	2%	1%	1%
Other	3%	2%	2%

You may view this document, as well as all other documents of this Department published in the Federal Register, in text or Adobe Portable Document Format (PDF) on the Internet at the following site: http://www.ed.gov/news/fedregister .

To use PDF you must have Adobe Acrobat Reader, which is available free at this site. If you have questions about using PDF, call the U.S. Government Printing Office (GPO), toll free, at 1-888-293-6498; or in the Washington, DC, area at (202) 512-1530.

Note:

The official version of this document is the document published in the Federal Register. Free Internet access to the official edition of the Federal Register and the Code of Federal Regulations is available on GPO Access at: http://www.gpoaccess.gov/nara/index.html

(Catalog of Federal Domestic Assistance Numbers: 84.007 Federal Supplemental Educational Opportunity Grant; 84.032 Federal Family Education Loan Program; 84.033 Federal Work-Study Program; 84.038 Federal Perkins Loan Program; 84.063 Federal Pell Grant Program; 84.268 William D. Ford Federal Direct Loan Program; 84.375 Academic Competitiveness Grant; 84.376 National Science and Mathematics Access to Retain Talent Grant)

Program Authority: 20 U.S.C. 1087rr.

Dated: May 27, 2009.

James F. Manning,

Acting Chief Operating Officer Federal Student Aid.

[FR Doc. E9-12668 Filed 6-1-09; 8:45 am]

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