[Federal Register: May 30, 2003 (Volume 68, Number 104)]
[Notices]
[Page 32468-32478]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30my03-53]
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DEPARTMENT OF EDUCATION
Federal Pell Grant, Federal Perkins Loan, Federal Work-Study,
Federal Supplemental Educational Opportunity Grant, Federal Family
Education Loan, and William D. Ford Federal Direct Loan Programs
AGENCY: Federal Student Aid, Department of Education.
ACTION: Notice of revision of the Federal need analysis methodology for
the 2004-2005 award year.
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SUMMARY: The Secretary of Education 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 2004-2005 under Part F of Title IV of the Higher
Education Act (HEA) of 1965, as amended (Title IV, HEA Programs). 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, HEA Programs include the Federal Pell Grant, campus-based (Federal
Perkins Loan, Federal Work-Study, and Federal Supplemental Educational
Opportunity Grant Programs), Federal Family Education Loan, and William
D. Ford Federal Direct Loan Programs.
FOR FURTHER INFORMATION CONTACT: Ms. Edith Bell, Management and Program
Analysis, U.S. Department of Education, Union Center Plaza, 830 First
Street, NE., Washington, DC 20202. Telephone: (202) 377-3231. If you
use a telecommunications device for the deaf (TDD), you may call the
Federal Information Relay Service (FIRS) at 1-800-877-8339.
Individuals with disabilities may obtain this document in an
alternative format (e.g., Braille, large print, audiotape or computer
diskette) on request to the contact person listed in the preceding
paragraph.
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 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 to
take into account inflation. The changes are based, in general, upon
increases in the Consumer Price Index.
For the award year 2004-2005 the Secretary is charged with updating
the income protection allowance, adjusted net worth of a business or
farm, and the assessment schedules and rates to account for inflation
that took place between December 2002 and December 2003. However, since
the Secretary must publish these tables before December 2003, 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 2002. The Secretary estimates that the increase in the
Consumer Price Index for all Urban Consumers for the period December
2002 through December 2003 will be 2.2 percent. The updated tables are
in sections 1, 2, and 4 of this notice.
The Secretary must also revise, for each award year, the table on
asset protection allowance as provided for in section 478(d) of the
HEA. The Education Savings and Asset Protection Allowance table for the
award year 2004-2005 has been updated in section 3 of this notice.
Section 477(b)(5) of Part F of the HEA also requires the Secretary
to increase the amount specified for the Employment Expense Allowance
to account for inflation based upon increases in the Bureau of Labor
Statistics budget of the marginal costs for a two-worker compared to a
one-worker family for meals away from home, apparel and upkeep,
transportation, and housekeeping services. However, the Secretary has
determined that the magnitude of the marginal differences in the
applicable employment expenses adjusted for inflation does not support
increasing the amount of the Employment Expense Allowance. Furthermore,
because the statute does not provide for a reduction in this allowance,
it will remain the lesser of $3,000 or 35% of the earned income for the
2004-2005 award year.
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 $2,420. The income protection allowances for parents of dependent
students and independent students with dependents other than a spouse
for award year 2004-2005 are:
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Number in college
Family size ----------------------------------------------------------------
1 2 3 4 5
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2.............................................. 13,700 11,350 ........... ........... ...........
3.............................................. 17,060 14,730 12,380 ........... ...........
4.............................................. 21,070 18,720 16,390 14,050 ...........
5.............................................. 24,860 22,510 20,180 17,840 15,510
6.............................................. 29,070 26,730 24,400 22,060 19,730
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For each additional family member add $3,280.
For each additional college student subtract $2,330.
The income protection allowances for independent students and
independent students without dependents other than a spouse for award
year 2004-2005 are:
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Number in
Marital status college
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Single.......................................... 1 $5,490
Married......................................... 2 5,490
Married......................................... 1 8,780
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2. Adjusted Net Worth (NW) of a Business or Farm. A portion of the
full net value of a farm or business is excluded from the calculation
of an expected contribution since--(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, independent students
without
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dependents other than a spouse, and independent students with
dependents other than a spouse.
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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.
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4. Assessment Schedules and Rates. Two schedules that are subject
to updates, one for dependent students and one for independent students
with dependents other than a spouse, are used to determine the expected
contribution toward educational expenses from family financial
resources. For dependent students, the expected parental contribution
is derived from an assessment of the parents, adjusted available income
(AAI). For independent students with dependents other than a spouse,
the expected contribution 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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The contribution for an independent student with dependents other
than a spouse is computed according to the following schedule:
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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 with dependents, 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 meals
away from home, apparel and upkeep, transportation, and housekeeping
services.
The Secretary is not increasing this allowance for the 2004-2005
award year for the reasons stated above. 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 $3,000 or
35 percent of earned income.
6. Allowance for State and Other Taxes. This allowance for State
and other taxes protects a portion of the parents' and student's income
from being considered available for postsecondary educational expenses.
There are four tables 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.
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Electronic Access to This Document
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Note: The official version of this document is the document
published in the Federal Register. Free Internet access to the
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Regulations is available on GPO Access at: http://www.access.gpo.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;
William D. Ford Federal Direct Loan Program, 84.268)
Dated: May 28, 2003.
Theresa S. Shaw,
Chief Operating Officer, Federal Student Aid.
[FR Doc. 03-13680 Filed 5-29-03; 8:45 am]
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