[Federal Register: May 31, 2002 (Volume 67, Number 105)]
[Notices]
[Page 38079-38083]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31my02-56]
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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 2003-2004 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 2003-2004 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
Analyst, U.S. Department of Education, Federal Student Aid, Union
Center Plaza, 830 First Street NE, Washington, DC 20002-5345.
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 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 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 2003-2004 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 2001 and December 2002. However, since
the Secretary must publish these tables before December 2002, 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 2001. The Secretary estimates that the increase in the
Consumer Price Index for all urban Consumers for the period December
2001 through December 2002 will be 2.8 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 of
asset protection allowances as provided for in section 478 (d) of the
HEA. The Education Savings and Asset Protection Allowance table for the
award year 2003-2004 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-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 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 and number in college. The income protection allowance for
the dependent student is $2,380. The income protection allowances for
parents of dependent students and independent students with dependents
other than a spouse for award year 2003-2004 are:
[[Page 38080]]
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Number in College--
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1 2 3 4 5
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Family size:
2.......................................... 13,470 11,160 ........... ........... ...........
3.......................................... 16,770 14,480 12,170 ........... ...........
4.......................................... 20,710 18,410 16,120 13,810 ...........
5.......................................... 24,440 22,130 19,840 17,540 15,240
6.......................................... 28,580 26,280 23,900 21,680 19,390
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For each additional family member add $3,230.
For each additional college student substract $2,290.
The income protection allowances for single independent students
and for independent students without dependents other than a spouse for
award year 2003-2004 are:
------------------------------------------------------------------------
Number in
Marital status college Amount
------------------------------------------------------------------------
Single........................................... 1 $5,400
Married.......................................... 2 5,400
Married.......................................... 1 8,640
------------------------------------------------------------------------
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 without dependents other than a spouse, and
independent students with dependents other than a spouse.
------------------------------------------------------------------------
If the net worth of a business or farm Then the adjusted net worth is--
is--
------------------------------------------------------------------------
Less than $1........................... $0
$1 to $95,000........................ $0 + 40% of NW
$95,001 to $290,000.................. $38,000 + 50% of NW over
$95,000
$290,001 to $480,000................. $135,000 + 60% of NW over
$290,000
$480,001 or more..................... $249,500 + 100% of NW over
$480,000
------------------------------------------------------------------------
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 of parents of dependent
students, one for independent students without dependents other than a
spouse, and one for the 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
------------------------------------------------------------------------
then the education
savings and asset
protection allowance is--
-------------------------
25 or less.................................... 0 0
26............................................ 2,500 1,200
27............................................ 5,000 2,500
28............................................ 7,500 3,700
29............................................ 9,900 5,000
30............................................ 12,400 6,200
31............................................ 14,900 7,400
32............................................ 17,400 8,700
33............................................ 19,900 9,900
34............................................ 22,400 11,200
35............................................ 24,900 12,400
36............................................ 27,400 13,600
37............................................ 29,800 14,900
38............................................ 32,300 16,100
39............................................ 34,800 17,400
40............................................ 37,300 18,600
41............................................ 38,200 19,000
42............................................ 39,200 19,400
43............................................ 40,200 19,800
44............................................ 41,200 20,300
45............................................ 42,200 20,700
46............................................ 43,300 21,100
47............................................ 44,300 21,600
48............................................ 45,400 22,200
49............................................ 46,600 22,600
50............................................ 47,700 23,100
51............................................ 49,200 23,700
52............................................ 50,400 24,200
53............................................ 51,700 24,800
54............................................ 53,200 25,400
55............................................ 54,500 26,200
56............................................ 56,200 26,800
57............................................ 57,900 27,400
58............................................ 59,600 28,200
59............................................ 61,400 28,900
60............................................ 63,200 29,700
61............................................ 65,100 30,500
62............................................ 67,300 31,200
63............................................ 69,200 32,100
64............................................ 71,600 33,100
65 and over................................... 74,000 34,100
------------------------------------------------------------------------
Independent Students Without Dependents Other Than a Spouse
------------------------------------------------------------------------
And the student is
If the age of the student is-- -------------------------
married single
------------------------------------------------------------------------
then the education
savings and asset
protection allowance is--
-------------------------
25 or less.................................... 0 0
26............................................ 2,500 1,200
27............................................ 5,000 2,500
28............................................ 7,500 3,700
29............................................ 9,900 5,000
30............................................ 12,400 6,200
31............................................ 14,900 7,400
32............................................ 17,400 8,700
33............................................ 19,900 9,900
34............................................ 22,400 11,200
35............................................ 24,900 12,400
36............................................ 27,400 13,600
37............................................ 29,800 14,900
38............................................ 32,300 16,100
39............................................ 34,800 17,400
40............................................ 37,300 18,600
41............................................ 38,200 19,000
42............................................ 39,200 19,400
43............................................ 40,200 19,800
44............................................ 41,200 20,300
45............................................ 42,200 20,700
46............................................ 43,300 21,100
47............................................ 44,300 21,600
48............................................ 45,400 22,200
49............................................ 46,600 22,600
50............................................ 47,700 23,100
51............................................ 49,200 23,700
[[Page 38081]]
52............................................ 50,400 24,200
53............................................ 51,700 24,800
54............................................ 53,200 25,400
55............................................ 54,500 26,200
56............................................ 56,200 26,800
57............................................ 57,900 27,400
58............................................ 59,600 28,200
59............................................ 61,400 28,900
60............................................ 63,200 29,700
61............................................ 65,100 30,500
62............................................ 67,300 31,200
63............................................ 69,200 32,100
64............................................ 71,600 33,100
65 and over................................... 74,000 34,100
------------------------------------------------------------------------
Independent Students With Dependents Other Than a Spouse
------------------------------------------------------------------------
And the student is
If the Age of the student is-- -------------------------
married single
------------------------------------------------------------------------
then the education
savings and asset
protection allowance is--
-------------------------
25 or less.................................... 0 0
26............................................ 2,500 1,200
27............................................ 5,000 2,500
28............................................ 7,500 3,700
29............................................ 9,900 5,000
30............................................ 12,400 6,200
31............................................ 14,900 7,400
32............................................ 17,400 8,700
33............................................ 19,900 9,900
34............................................ 22,400 11,200
35............................................ 24,900 12,400
36............................................ 27,400 13,600
37............................................ 29,800 14,900
38............................................ 32,300 16,100
39............................................ 34,800 17,400
40............................................ 37,300 18,600
41............................................ 38,200 19,000
42............................................ 39,200 19,400
43............................................ 40,200 19,800
44............................................ 41,200 20,300
45............................................ 42,200 20,700
46............................................ 43,300 21,100
47............................................ 44,300 21,600
48............................................ 45,400 22,200
49............................................ 46,600 22,600
50............................................ 47,400 23,100
51............................................ 49,200 23,700
52............................................ 50,400 24,200
53............................................ 51,700 24,800
54............................................ 53,200 25,400
55............................................ 54,500 26,200
56............................................ 56,200 26,800
57............................................ 57,900 27,400
58............................................ 59,600 28,200
59............................................ 61,400 28,900
60............................................ 63,200 29,700
61............................................ 65,100 30,500
62............................................ 67,300 31,200
63............................................ 69,200 32,100
64............................................ 71,600 33,100
65 and over................................... 74,000 34,100
------------------------------------------------------------------------
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:
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
If AAI is-- Then the contribution is--
Less than -$3,409 ($3,409).............. -$750
($3,409) to $12,000..................... ........................ 22% of AAI
$12,001 to $15,100...................... $2,640 + 25% of AAI over $12,000
$15,101 to $18,200...................... $3,415 + 29% of AAI over $15,100
$18,201 to $21,200...................... $4,314 + 34% of AAI over $18,200
$21,201 to $24,300...................... $5,334 + 40% of AAI over $21,200
$24,301 or more......................... $6,574 + 47% of AAI over $24,300
----------------------------------------------------------------------------------------------------------------
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 ($3,409).............. -$750
($3,409) to $12,000..................... ........................ 22% of AAI
$12,001 to $15,100...................... $2,640 + 25% of AAI over $12,000
$15,101 to $18,200...................... $3,415 + 29% of AAI over $15,100
$18,201 to $21,200...................... $4,314 + 34% of AAI over $18,200
$21,201 to $24,300...................... $5,334 + 40% of AAI over $21,200
$24,301 or more......................... $6,574 + 47% of AAI over $24,300
----------------------------------------------------------------------------------------------------------------
5. Employment Expense Allowance. This allowance for employment-
related expenses, which is used for the parents of dependent students
and for married independent students 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 wage-earner family compared to a one-wage 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 $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
[[Page 38082]]
students, independent students with dependents other than a spouse,
dependent students, and independent students without 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
------------------------------------------------------------------------
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 6 5
Mexico, Missouri, West Virginia, Arizona,
Indiana, Oklahoma, Arkansas................
New Hampshire, Pennsylvania, Colorado, 7 6
Georgia, Kansas, Kentucky, Idaho...........
North Carolina, Virginia, Delaware, South 8 7
Carolina, Ohio, Utah, Nebraska, Montana,
California, New Jersey, Iowa, Vermont,
Hawaii.....................................
Massachusetts, Rhode Island, Michigan, 9 8
Minnesota, Maine, Maryland.................
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 for ---------------------------
residence is-- less than $15,000 or
$15,000 more
------------------------------------------------------------------------
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 6 5
Mexico, Missouri, West Virginia, Arizona,
Indiana, Oklahoma, Arkansas................
New Hampshire, Pennsylvania, Colorado, 7 6
Georgia, Kansas, Kentucky, Idaho...........
North Carolina, Virginia, Delaware, South 8 7
Carolina, Ohio, Utah, Nebraska, Montana,
California, New Jersey, Iowa, Vermont,
Hawaii.....................................
Massachusetts, Rhode Island, Michigan, 9 8
Minnesota, Maine, Maryland.................
District of Columbia, Wisconsin, Oregon..... 10 9
New York.................................... 11 10
Other....................................... 4 3
------------------------------------------------------------------------
Dependent Students
------------------------------------------------------------------------
The percentage
If student's State or territory of residence is-- is--
------------------------------------------------------------------------
Alaska, Texas, South Dakota, Wyoming, Washington, 0
Tennessee, Nevada......................................
Florida, New Hampshire.................................. 1
Connecticut, Louisiana, Illinois, North Dakota.......... 2
Mississippi, Arizona, Alabama, Pennsylvania, New Jersey, 3
Missouri...............................................
Nebraska, Indiana, Colorado, New Mexico, Oklahoma, 4
Kansas, West Virginia, Rhode Island, Virginia, Georgia,
Arkansas, Vermont, Michigan............................
Montana, Idaho, Utah, Kentucky, Massachusetts, 5
California, North Carolina, South Carolina, Ohio, Iowa,
Delaware, Maine, Wisconsin.............................
Oregon, Maryland, Minnesota, Hawaii..................... 6
District of Columbia, New York.......................... 7
Other................................................... 2
------------------------------------------------------------------------
Independent Students Without Dependents Other Than a Spouse
------------------------------------------------------------------------
The percentage
If student's State or territory of residence is-- is--
------------------------------------------------------------------------
Alaska, Texas, South Dakota, Wyoming, Washington, 0
Tennessee, Nevada......................................
Florida, New Hampshire.................................. 1
Connecticut, Louisiana, Illinois, North Dakota.......... 2
Mississippi, Arizona, Alabama, Pennsylvania, New Jersey, 3
Missouri...............................................
[[Page 38083]]
Nebraska, Indiana, Colorado, New Mexico, Oklahoma, 4
Kansas, West Virginia, Rhode Island, Virginia, Georgia,
Arkansas, Vermont, Michigan............................
Montana, Idaho, Utah, Kentucky, Massachusetts, 5
California, North Carolina, South Carolina, Ohio, Iowa,
Delaware, Maine, Wisconsin.............................
Oregon, Maryland, Minnesota, Hawaii..................... 6
District of Columbia, New York.......................... 7
Other................................................... 2
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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.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, 2002.
Candy Kane,
Acting Chief Operating Officer, Federal Student Aid.
[FR Doc. 02-13704 Filed 5-30-02; 8:45 am]
BILLING CODE 4000-01-M