FR Doc E8-11953[Federal Register: May 29, 2008 (Volume 73, Number 104)] [Notices] [Page 30904-30908] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr29my08-53] Download: ----------------------------------------------------------------------- DEPARTMENT OF EDUCATION 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 AGENCY: Federal Student Aid, U.S. Department of Education. ACTION: Notice of revision of the Federal Need Analysis Methodology for the 2009-2010 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 2009-2010 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, 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 alternative format (e.g., Braille, large print, audiotape or compact disk) 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 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 to adjust for general price inflation. The changes are based, in general, upon increases in the Consumer Price Index. For award year 2009-2010 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 2007 and December [[Page 30905]] 2008. However, because the Secretary must publish these tables before December 2008, 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 2008. The Secretary estimates that the increase in the Consumer Price Index for All Urban Consumers (CPI-U) for the period December 2007 through December 2008 will be 1.7 percent. Additionally, the College Cost Reduction and Access Act (CCRAA, Pub. L. 110-84) modified the updating procedure for the income protection allowance for dependent students and the income protection allowance tables for both independent students with dependents other than a spouse and independent students without dependents other than a spouse. CCRAA established new 2009-2010 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 2009-2010 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 2009-2010 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 $3,750. The income protection allowances for parents of dependent students for award year 2009-2010 are: ---------------------------------------------------------------------------------------------------------------- Parents of dependent students ----------------------------------------------------------- Family size Number in college ----------------------------------------------------------- 1 2 3 4 5 ---------------------------------------------------------------------------------------------------------------- 2................................................... $15,840 $13,130 .......... .......... .......... 3................................................... 19,730 17,030 $14,320 .......... .......... 4................................................... 24,370 21,660 18,960 $16,250 5................................................... 28,750 26,040 23,340 20,630 $17,940 6................................................... 33,630 30,920 28,220 25,510 22,820 ---------------------------------------------------------------------------------------------------------------- For each additional family member, add $3,800. For each additional college student, subtract $2,700. The income protection allowances for independent students with dependents other than a spouse for award year 2009-10 are: ---------------------------------------------------------------------------------------------------------------- Independent students with dependents other than a spouse ----------------------------------------------------------- Family size Number in college ----------------------------------------------------------- 1 2 3 4 5 ---------------------------------------------------------------------------------------------------------------- 2................................................... $17,720 $14,690 .......... .......... .......... 3................................................... 22,060 19,050 $16,020 .......... .......... 4................................................... 27,250 24,220 21,210 $18,170 .......... 5................................................... 32,150 29,120 26,100 23,070 $20,060 6................................................... 37,600 34,570 31,570 28,520 25,520 ---------------------------------------------------------------------------------------------------------------- For each additional family member, add $4,240. For each additional college student, subtract $3,020. The income protection allowances for single independent students and independent students without dependents other than a spouse for award year 2009-10 are: ------------------------------------------------------------------------ Number in Marital status college IPA ------------------------------------------------------------------------ Single.......................................... 1 $7,000 Married......................................... 2 7,000 Married......................................... 1 11,220 ------------------------------------------------------------------------ 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 $340,000......................... $46,000 + 50% of NW over $115,000 $340,001 to $565,000......................... $158,500 + 60% of NW over $340,000 [[Page 30906]] $565,001 or more............................. $293,500 + 100% of NW over $565,000 ---------------------------------------------------------------------------------------------------------------- 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 ------------------------------------------------------------------------ And they are If the age of the older parent is --------------------- Married Single ------------------------------------------------------------------------ Then the education savings and asset protection allowance is-- ------------------------------------------------------------------------ 25 or less........................................ 0 0 26................................................ 2,900 1,200 27................................................ 5,800 2,400 28................................................ 8,700 3,600 29................................................ 11,600 4,800 30................................................ 14,500 6,000 31................................................ 17,400 7,200 32................................................ 20,300 8,400 33................................................ 23,100 9,500 34................................................ 26,000 10,700 35................................................ 28,900 11,900 36................................................ 31,800 13,100 37................................................ 34,700 14,300 38................................................ 37,600 15,500 39................................................ 40,500 16,700 40................................................ 43,400 17,900 41................................................ 44,200 18,200 42................................................ 45,300 18,600 43................................................ 46,400 19,100 44................................................ 47,600 19,500 45................................................ 48,700 19,900 46................................................ 49,900 20,400 47................................................ 51,200 20,900 48................................................ 52,400 21,400 49................................................ 53,700 21,900 50................................................ 55,300 22,400 51................................................ 56,700 22,900 52................................................ 58,000 23,500 53................................................ 59,800 24,000 54................................................ 61,200 24,600 55................................................ 63,000 25,300 56................................................ 64,900 25,900 57................................................ 66,400 26,500 58................................................ 68,300 27,200 59................................................ 70,300 27,900 60................................................ 72,300 28,700 61................................................ 74,400 29,500 62................................................ 76,600 30,300 63................................................ 79,100 31,100 64................................................ 81,300 32,000 65 or older....................................... 84,000 32,800 ------------------------------------------------------------------------ Independent Students Without Dependents Other Than a Spouse ------------------------------------------------------------------------ And they are If the age of the student is --------------------- Married Single ------------------------------------------------------------------------ Then the education savings and asset protection allowance is-- ------------------------------------------------------------------------ 25 or less........................................ 0 0 26................................................ 2,900 1,200 27................................................ 5,800 2,400 28................................................ 8,700 3,600 29................................................ 11,600 4,800 30................................................ 14,500 6,000 31................................................ 17,400 7,200 32................................................ 20,300 8,400 33................................................ 23,100 9,500 34................................................ 26,000 10,700 35................................................ 28,900 11,900 36................................................ 31,800 13,100 37................................................ 34,700 14,300 38................................................ 37,600 15,500 39................................................ 40,500 16,700 40................................................ 43,400 17,900 41................................................ 44,200 18,200 42................................................ 45,300 18,600 43................................................ 46,400 19,100 44................................................ 47,600 19,500 45................................................ 48,700 19,900 46................................................ 49,900 20,400 47................................................ 51,200 20,900 48................................................ 52,400 21,400 49................................................ 53,700 21,900 50................................................ 55,300 22,400 51................................................ 56,700 22,900 52................................................ 58,000 23,500 53................................................ 59,800 24,000 54................................................ 61,200 24,600 55................................................ 63,000 25,300 56................................................ 64,900 25,900 57................................................ 66,400 26,500 58................................................ 68,300 27,200 59................................................ 70,300 27,900 60................................................ 72,300 28,700 61................................................ 74,400 29,500 62................................................ 76,600 30,300 63................................................ 79,100 31,100 64................................................ 81,300 32,000 65 or older....................................... 84,000 32,800 ------------------------------------------------------------------------ Independent Students With Dependents Other Than a Spouse ------------------------------------------------------------------------ And they are If the age of the student is --------------------- Married Single ------------------------------------------------------------------------ Then the education savings and asset protection allowance is-- ------------------------------------------------------------------------ 25 or less........................................ 0 0 26................................................ 2,900 1,200 27................................................ 5,800 2,400 28................................................ 8,700 3,600 29................................................ 11,600 4,800 30................................................ 14,500 6,000 31................................................ 17,400 7,200 32................................................ 20,300 8,400 33................................................ 23,100 9,500 34................................................ 26,000 10,700 35................................................ 28,900 11,900 36................................................ 31,800 13,100 37................................................ 34,700 14,300 38................................................ 37,600 15,500 39................................................ 40,500 16,700 40................................................ 43,400 17,900 41................................................ 44,200 18,200 42................................................ 45,300 18,600 43................................................ 46,400 19,100 44................................................ 47,600 19,500 45................................................ 48,700 19,900 46................................................ 49,900 20,400 47................................................ 51,200 20,900 48................................................ 52,400 21,400 49................................................ 53,700 21,900 50................................................ 55,300 22,400 51................................................ 56,700 22,900 52................................................ 58,000 23,500 53................................................ 59,800 24,000 54................................................ 61,200 24,600 55................................................ 63,000 25,300 56................................................ 64,900 25,900 57................................................ 66,400 26,500 58................................................ 68,300 27,200 59................................................ 70,300 27,900 60................................................ 72,300 28,700 61................................................ 74,400 29,500 62................................................ 76,600 30,300 63................................................ 79,100 31,100 64................................................ 81,300 32,000 65 or older....................................... 84,000 32,800 ------------------------------------------------------------------------ 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. [[Page 30907]] 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 $14,200......... 22% of AAI $14,201 to $17,800.......... $3,124 + 25% of AAI over $14,200 $17,801 to $21,400.......... $4,024 + 29% of AAI over $17,800 $21,401 to $25,000.......... $5,068 + 34% of AAI over $21,400 $25,001 to $28,600.......... $6,292 + 40% of AAI over $25,000 $28,601 or more............. $7,732 + 47% of AAI over $28,600 ------------------------------------------------------------------------ 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 $14,200......... 22% of AAI $14,201 to $17,800.......... $3,124 + 25% of AAI over $14,200 $17,801 to $21,400.......... $4,024 + 29% of AAI over $17,800 $21,401 to $25,000.......... $5,068 + 34% of AAI over $21,400 $25,001 to $28,600.......... $6,292 + 40% of AAI over $25,000 $28,601 or more............. $7,732 + 47% of AAI over $28,600 ------------------------------------------------------------------------ 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. ---------------------------------------------------------------------------------------------------------------- Parents of dependents and Dependents and independents with dependents other independents than a spouse without State ------------------------------------ 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................................................ 8 7 5 Colorado.................................................. 5 4 3 Connecticut............................................... 8 7 4 Delaware.................................................. 4 3 3 District of Columbia...................................... 7 6 6 Florida................................................... 3 2 1 Georgia................................................... 5 4 4 Hawaii.................................................... 5 4 4 Idaho..................................................... 5 4 3 Illinois.................................................. 5 4 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 [[Page 30908]] 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 3 New York.................................................. 9 8 6 North Carolina............................................ 6 5 4 North Dakota.............................................. 3 2 1 Ohio...................................................... 6 5 4 Oklahoma.................................................. 4 3 3 Oregon.................................................... 7 6 5 Pennsylvania.............................................. 6 5 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................................................... 5 4 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 ---------------------------------------------------------------------------------------------------------------- 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 22, 2008. Lawrence A. Warder, Acting Chief Operating Officer, Federal Student Aid. [FR Doc. E8-11953 Filed 5-28-08; 8:45 am] BILLING CODE 4000-01-P