[Federal Register: May 29, 1997 (Volume 62, Number 103)] [Notices] [Page 29271-29275] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr29my97-152] [[Page 29271]] _______________________________________________________________________ Part V 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; Revision of the Need Analysis Methodology for the 1998-99 Award Year; Notice [[Page 29272]] ----------------------------------------------------------------------- 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; Revision of the Need Analysis Methodology for the 1998-99 Award Year AGENCY: Department of Education. ACTION: Notice. ----------------------------------------------------------------------- SUMMARY: The Secretary of Education announces the annual updates to the tables that will be used in the statutory ``Federal Needs Analysis Methodology'' to determine a student's expected family contribution (EFC) for award year 1998-99 for the Title IV, HEA student financial assistance programs (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. 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, Program Specialist, General Provisions Branch, Policy Development Division, U.S. Department of Education, 600 Independence Avenue, S.W. (Room 3053, ROB-3), Washington, D.C. 20202-5444, telephone (202) 708-8242. Deaf and hearing impaired individuals may call the Federal Information Relay Service at 1-800-877-8339 between 8 a.m. and 8 p.m., Eastern time, Monday through Friday. SUPPLEMENTARY INFORMATION: Part F of Title IV of the Higher Education Act of 1965, as amended (HEA), specifies the criteria, data elements, calculations and tables used in the Federal Needs Analysis Methodology EFC calculations. Section 478 in Part F 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 1998-99, the Secretary is charged with updating the income protection allowances, adjusted net worth of a business or farm, and the assessment schedules and rates to account for inflation that took place between December 1996 and December 1997. However, since the Secretary must publish these tables before December 1997, 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 1996. The Secretary estimates that the increase in the Consumer Price Index for all Urban Consumers for the period December 1996 through December 1997 will be 2.4 percent. The updated tables for the 1998-99 award year are set forth in sections 1, 2, and 4. The Secretary must also revise, for each award year, the table on asset protection allowance as provided for in section 478(d). The Education Savings and Asset Protection Allowance table for the award year 1998-99 has been updated below in section 3. Section 477(b)(5) of Part F 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-earner compared to a one-earner family for meals away from home, apparel and upkeep, transportation, and housekeeping services. Therefore, the Secretary is increasing this allowance as described in section 5. The HEA provides for the following annual updates: 1. Income Protection Allowance. This allowance is the amount of reasonable living expenses that would be associated with the maintenance of an individual or family. The allowance is offset against the family's income and varies by family size. The income protection allowances for parents of dependent students and independent students with dependents other than a spouse for the award year 1998-99 are: ---------------------------------------------------------------------------------------------------------------- Number in college Family size (including student) ------------------------------------------------------------------------------- 1 2 3 4 5 ---------------------------------------------------------------------------------------------------------------- 2............................... $12,030 $9,980 .............. .............. .............. 3............................... 14,990 12,940 $10,880 .............. .............. 4............................... 18,510 16,450 14,400 $12,340 .............. 5............................... 21,840 19,780 17,730 15,670 $13,630 6............................... 25,550 23,490 21,440 19,380 17,330 For each additional family member add $2,880. For each additional college student subtract $2,050. ---------------------------------------------------------------------------------------------------------------- 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 such 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 $85,000............................... 40% of NW. $85,001 to $255,000......................... $34,000+50% of NW over $85,000. $255,001 to $430,000........................ $119,000+60% of NW over $255,000. $430,001 or more............................ $224,000+100% of NW over $430,000. ---------------------------------------------------------------------------------------------------------------- [[Page 29273]] 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 And there are If the age of the older parent is ------------------------- Two parents One parent ------------------------- (1)Then the education savings and asset protection allowance is-- ------------------------------------------------------------------------ 25 or less.................................... 0 0 26............................................ 2,400 1,600 27............................................ 4,800 3,300 28............................................ 7,300 4,900 29............................................ 9,700 6,600 30............................................ 12,100 8,200 31............................................ 14,500 9,800 32............................................ 16,900 11,500 33............................................ 19,400 13,100 34............................................ 21,800 14,800 35............................................ 24,200 16,400 36............................................ 26,600 18,000 37............................................ 29,000 19,700 38............................................ 31,500 21,300 39............................................ 33,900 23,000 40............................................ 36,300 24,600 41............................................ 37,300 25,200 42............................................ 38,200 26,700 43............................................ 39,200 26,300 44............................................ 40,200 26,900 45............................................ 41,200 27,400 46............................................ 42,300 28,100 47............................................ 43,300 28,800 48............................................ 44,400 29,300 49............................................ 45,500 30,000 50............................................ 46,700 30,700 51............................................ 48,100 31,500 52............................................ 49,400 32,200 53............................................ 50,900 33,000 54............................................ 52,100 33,800 55............................................ 53,700 34,700 56............................................ 55,400 35,600 57............................................ 57,100 36,400 58............................................ 58,800 37,500 59............................................ 60,600 38,500 60............................................ 62,400 39,400 61............................................ 64,500 40,500 62............................................ 66,800 41,700 63............................................ 68,700 42,900 64............................................ 71,100 44,000 65 and over................................... 73,500 45,500 ------------------------------------------------------------------------ Independent Students Without Dependents Other Than a Spouse And the student is If the age of the student is ------------------------- Married Single ------------------------- (1)Then the education savings and asset protection allowance is-- ------------------------------------------------------------------------ 25 or less.................................... 0 0 26............................................ 2,400 1,600 27............................................ 4,800 3,300 28............................................ 7,300 4,900 29............................................ 9,700 6,600 30............................................ 12,100 8,200 31............................................ 14,500 9,800 32............................................ 16,900 11,500 33............................................ 19,400 13,100 34............................................ 21,800 14,800 35............................................ 24,200 16,400 36............................................ 26,600 18,000 37............................................ 29,000 19,700 38............................................ 31,500 21,300 39............................................ 33,900 23,000 40............................................ 36,300 24,600 41............................................ 37,300 25,200 42............................................ 38,200 26,700 43............................................ 39,200 26,300 44............................................ 40,200 26,900 45............................................ 41,200 27,400 46............................................ 42,300 28,100 47............................................ 43,300 28,800 48............................................ 44,400 29,300 49............................................ 45,500 30,000 50............................................ 46,700 30,700 51............................................ 48,100 31,500 52............................................ 49,400 32,200 53............................................ 50,900 33,000 54............................................ 52,100 33,800 55............................................ 53,700 34,700 56............................................ 55,400 35,600 57............................................ 57,100 36,400 58............................................ 58,800 37,500 59............................................ 60,600 38,500 60............................................ 62,400 39,400 61............................................ 64,500 40,500 62............................................ 66,800 41,700 63............................................ 68,700 42,900 64............................................ 71,100 44,000 65 and over................................... 73,500 45,500 ------------------------------------------------------------------------ Independent Students With Dependents Other Than a Spouse And the student is If the age of the student is ------------------------- Married Single ------------------------- (1)Then the education savings and asset protection allowance is-- ------------------------------------------------------------------------ 25 or less.................................... 0 0 26............................................ 2,400 1,600 27............................................ 4,800 3,300 28............................................ 7,300 4,900 29............................................ 9,700 6,600 30............................................ 12,100 8,200 31............................................ 14,500 9,800 32............................................ 16,900 11,500 33............................................ 19,400 13,100 34............................................ 21,800 14,800 35............................................ 24,200 16,400 36............................................ 26,600 18,000 37............................................ 29,000 19,700 38............................................ 31,500 21,300 39............................................ 33,900 23,000 40............................................ 36,300 24,600 41............................................ 37,300 25,200 42............................................ 38,200 26,700 43............................................ 39,200 26,300 44............................................ 40,200 26,900 45............................................ 41,200 27,400 46............................................ 42,300 28,100 47............................................ 43,300 28,800 48............................................ 44,400 29,300 49............................................ 45,500 30,000 50............................................ 46,700 30,700 51............................................ 48,100 31,500 52............................................ 49,400 32,200 53............................................ 50,900 33,000 54............................................ 52,100 33,800 55............................................ 53,700 34,700 56............................................ 55,400 35,600 57............................................ 57,100 36,400 58............................................ 58,800 37,500 59............................................ 60,600 38,500 60............................................ 62,400 39,400 61............................................ 64,500 40,500 62............................................ 66,800 41,700 63............................................ 68,700 42,900 64............................................ 71,100 44,000 65 and over................................... 73,500 45,500 ------------------------------------------------------------------------ 4. Assessment Schedules and Rates. Two separate assessment schedules--one for dependent students, and one for independent students with dependents other than a spouse--are used in determining the expected family 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 financial strength which considers both income and assets. ---------------------------------------------------------------------------------------------------------------- If AAI is-- Then the contribution is-- ---------------------------------------------------------------------------------------------------------------- Less than -$3,409........................... -$750. -$3,409 to $10,800.......................... 22% of AAI. $10,801 to $13,500.......................... $2,376 + 25% of AAI over $10,800. $13,501 to $16,200.......................... $3,051 + 29% of AAI over $13,500. [[Page 29274]] $16,201 to $19,000.......................... $3,834 + 34% of AAI over $16,200. $19,001 to $21,700.......................... $4,786 + 40% of AAI over $19,000. $21,701 or more............................. $5,866 + 47% of AAI over $21,700. ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- If AAI is-- Then the contribution is-- ---------------------------------------------------------------------------------------------------------------- Less than -$3,409........................... -$750. -$3,409 to $10,800.......................... 22% of AAI. $10,801 to $13,500.......................... $2,376 + 25% of AAI over $10,800. $13,501 to $16,200.......................... $3,051 + 29% of AAI over $13,500. $16,201 to $19,000.......................... $3,834 + 34% of AAI over $16,200. $19,001 to $21,700.......................... $4,786 + 40% of AAI over $19,000. $21,701 or more............................. $5,866 + 47% of AAI over $21,700. ---------------------------------------------------------------------------------------------------------------- 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-earner family compared to a one-earner family for meals away from home, apparel and upkeep, transportation, and housekeeping services. 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 $2,800 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 education expenses. There are four tables for state and other taxes, one each for parents of dependent students, dependent students, independent students without dependents other than a spouse, and independent students with dependents other than a spouse. Parents of Dependent Students ------------------------------------------------------------------------ And parents' total income is-- If parents' State or territory of residence is ------------------------- Less than $15,000 or $15,000 more ------------------------------------------------------------------------ (1) Then the percentage is-- ------------------------- Wyoming, Tennessee, Nevada, Alaska, Texas..... 3 2 Louisiana, Florida, Washington, South Dakota.. 4 3 Alabama, Mississippi.......................... 5 4 North Dakota, Illinois, Connecticut, New Mexico, Missouri, West Virginia, Arizona, Indiana, Oklahoma, Arkansas.................. 6 5 New Hampshire, Pennsylvania, Colorado, Georgia, Kansas, Kentucky, Idaho............. 7 6 North Carolina, Virginia, Delaware, South Carolina, Ohio, Utah, Nebraska, Montana, California, New Jersey, Iowa, Vermont, Hawaii 8 7 Massachusetts, Rhode Island, Michigan, Minnesota, Maine, Maryland................... 9 8 District of Columbia, Wisconsin, Oregon....... 10 9 New York...................................... 11 10 Other......................................... 4 3 ------------------------------------------------------------------------ Independent Students With Dependents Other Than a Spouse ------------------------------------------------------------------------ And student's total income is-- If student's State or territory of residence ------------------------- is Less than $15,000 or $15,000 more ------------------------------------------------------------------------ (1) Then the percentage is-- ------------------------- Wyoming, Tennessee, Nevada, Alaska, Texas..... 3 2 Louisiana, Florida, Washington, South Dakota.. 4 3 Alabama, Mississippi.......................... 5 4 North Dakota, Illinois, Connecticut, New Mexico, Missouri, West Virginia, Arizona, Indiana, Oklahoma, Arkansas.................. 6 5 New Hampshire, Pennsylvania, Colorado, Georgia, Kansas, Kentucky, Idaho............. 7 6 North Carolina, Virginia, Delaware, South Carolina, Ohio, Utah, Nebraska, Montana, California, New Jersey, Iowa, Vermont, Hawaii 8 7 Massachusetts, Rhode Island, Michigan, Minnesota, Maine, Maryland................... 9 8 District of Columbia, Wisconsin, Oregon....... 10 9 New York...................................... 11 10 [[Page 29275]] Other......................................... 4 3 ------------------------------------------------------------------------ Dependent Students ------------------------------------------------------------------------ The If student's State or territory of residence is percentage is-- ------------------------------------------------------------------------ Alaska, Texas, South Dakota, Wyoming, Washington, Tennessee, Nevada..................................................... 0 Florida, New Hampshire...................................... 1 Connecticut, Louisiana, Illinois, North Dakota.............. 2 Mississippi, Arizona, Alabama, Pennsylvania, New Jersey, Missouri................................................... 3 Nebraska, Indiana, Colorado, New Mexico, Oklahoma, Kansas, West Virginia, Rhode Island, Virginia, Georgia, Arkansas, Vermont, Michigan.......................................... 4 Montana, Idaho, Utah, Kentucky, Massachusetts, California, North Carolina, South Carolina, Ohio, Iowa, Delaware, Maine, Wisconsin........................................... 5 Oregon, Maryland, Minnesota, Hawaii......................... 6 District of Columbia, New York.............................. 7 Other....................................................... 2 ------------------------------------------------------------------------ Independent Students Without Dependents Other Than A Spouse ------------------------------------------------------------------------ The If student's State or territory of residence is percentage is-- ------------------------------------------------------------------------ Alaska, Texas, South Dakota, Wyoming, Washington, Tennessee, Nevada..................................................... 0 Florida, New Hampshire...................................... 1 Connecticut, Louisiana, Illinois, North Dakota.............. 2 Mississippi, Arizona, Alabama, Pennsylvania, New Jersey, Missouri................................................... 3 Nebraska, Indiana, Colorado, New Mexico, Oklahoma, Kansas, West Virginia, Rhode Island, Virginia, Georgia, Arkansas, Vermont, Michigan.......................................... 4 Montana, Idaho, Utah, Kentucky, Massachusetts, California, North Carolina, South Carolina, Ohio, Iowa, Delaware, Maine, Wisconsin........................................... 5 Oregon, Maryland, Minnesota, Hawaii......................... 6 District of Columbia, New York.............................. 7 Other....................................................... 2 ------------------------------------------------------------------------ Dated: May 23, 1997. David A. Longanecker, Assistant Secretary for Postsecondary Education. (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) [FR Doc. 97-14068 Filed 5-28-97; 8:45 am] BILLING CODE 4000-01-P