[Federal Register: May 31, 1996 (Volume 61, Number 106)]
[Notices]
[Page 27761-27765]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[[Page 27761]]
_______________________________________________________________________
Part V
Department of Education
_______________________________________________________________________
Postsecondary Education: Updates to Tables Used in the Need Analysis
Methodology for the 1997-98 Award Year; Notice
[[Page 27762]]
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;
Updates to Tables Used in the Need Analysis Methodology for the 1997-98
Award Year
AGENCY: Department of Education.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: The Secretary of Education announces the annual updates to the
tables included in the need analysis methodology that will be used to
calculate expected family contributions for the 1997-98 award year
under the Federal Pell Grant, campus-based (Federal Perkins Loan,
Federal Work-Study, and Federal Supplemental Educational Opportunity
Grant), Federal Family Education Loan and William D. Ford Federal
Direct Loan programs. These programs are known collectively as the
Title IV, HEA programs. The Secretary takes this action under the
authority of sections 477 and 478 of the Higher Education Act of 1965,
as amended (HEA).
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) 708-7888. 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: The need analysis methodology, referred to
as the ``Federal Needs Analysis Methodology,'' is set forth in Subpart
F of Title IV of the HEA. It is used to determine a student's
eligibility for assistance under the Title IV, HEA programs.
Federal Needs Analysis Methodology
Part F of Title IV of the HEA specifies the criteria, data
elements, calculations, and tables used in the computation of expected
family contributions for the Title IV, HEA programs. Section 478 of
Part F requires the Secretary to adjust annually for inflation four of
the tables included in Part F: 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. The
inflation changes are based, in general, upon the reported annual
inflation increase set forth in the Consumer Price Index for All Urban
Consumers that is issued by the United States Department of Labor.
For award year 1997-98, the Secretary is charged with updating the
tables for income protection allowances, adjusted net worth of a
business or farm, and the assessment schedules and rates to account for
inflation that took place in calendar year 1996. However, the Secretary
must publish these updated tables by June 1, 1996. Therefore, the
Secretary must update the tables based upon an estimate of the increase
in the Consumer Price Index for All Urban Consumers for that period.
The Secretary estimates that the Consumer Price Index for All Urban
Consumers will rise 3.3 percent during calendar year 1996. In making
this estimate, the Secretary assumed that the rate of increase for
calendar year 1996 will be the same as that reported for calendar year
1995.
The table in section 1 reflects the changes in the income
protection allowances. This change reflects a consumer price increase
of 3.3 percent rounded to the nearest $10.
The table in section 2 reflects the changes in the adjusted net
worth of a farm or business. This change reflects a consumer price
increase of 3.3 percent rounded to the nearest $5,000.
The table in section 3 reflects the changes in the education
savings and asset protection allowance. This change reflects a consumer
price increase of 3.3 percent rounded to the nearest $100.
The table in section 4 reflects the changes in the assessment
schedules and rates. This change reflects a consumer price increase of
3.3 percent rounded to the nearest $100.
Section 477(b)(5) of the HEA 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 table in section 5 reflects that
change.
The table in section 6, statutory allowances for State and other
taxes, has not been revised, but is included for informational
purposes.
The following sections set forth the above described tables.
1. Income Protection Allowance
This statutory allowance represents 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 and family members in college. The income
protection allowances for parents of dependent students and independent
students with dependents other than a spouse for the award year 1997-98
are:
----------------------------------------------------------------------------------------------------------------
Number in college
Family size (including student) -------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
2............................................................. $11,750 $9,740
3............................................................. 14,630 12,630 $10,620
4............................................................. 18,070 16,060 14,060 $12,050
5............................................................. 21,320 19,310 17,310 15,300 $13,300
6............................................................. 24,940 22,930 20,930 18,920 16,920
----------------------------------------------------------------------------------------------------------------
For each additional family member add $2,810.
For each additional college student subtract $2,000.
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
statutory 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.
[[Page 27763]]
------------------------------------------------------------------------
If the net worth of a business or farm is-- Then the adjusted net worth
is:
------------------------------------------------------------------------
Less than $1.............................. $0.
$1 to $85,000............................. $0 + 40% of NW.
$85,001 to $250,000....................... $34,000 + 50% of NW over
$85,000.
$250,001 to $420,000...................... $116,500 + 60% of NW over
$250,000.
$420,001 or more.......................... $218,500 + 100% of NW over
$420,000.
------------------------------------------------------------------------
3. Education Savings and Asset Protection Allowance
This statutory 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.................................... ........... ...........
26............................................ 2,400 1,700
27............................................ 4,700 3,300
28............................................ 7,100 5,000
29............................................ 9,500 6,600
30............................................ 11,800 8,300
31............................................ 14,200 10,000
32............................................ 16,600 11,600
33............................................ 18,900 13,300
34............................................ 21,300 14,900
35............................................ 23,700 16,600
36............................................ 26,000 18,300
37............................................ 28,400 19,900
38............................................ 30,800 21,600
39............................................ 33,100 23,200
40............................................ 35,500 24,900
41............................................ 36,400 25,400
42............................................ 37,300 26,000
43............................................ 38,300 26,500
44............................................ 39,300 27,100
45............................................ 40,300 27,800
46............................................ 41,300 28,300
47............................................ 42,400 29,000
48............................................ 43,400 29,700
49............................................ 44,500 30,400
50............................................ 45,900 31,200
51............................................ 47,100 31,900
52............................................ 48,300 32,700
53............................................ 49,800 33,500
54............................................ 51,300 34,300
55............................................ 52,600 35,100
56............................................ 54,200 36,100
57............................................ 55,900 36,900
58............................................ 57,600 38,000
59............................................ 59,600 39,100
60............................................ 61,400 40,000
61............................................ 63,200 41,100
62............................................ 65,400 42,300
63............................................ 67,700 43,500
64............................................ 70,000 44,900
65 and over................................... 72,400 46,100
------------------------------------------------------------------------
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.................................... ........... ...........
26............................................ 2,400 1,700
27............................................ 4,700 3,300
28............................................ 7,100 5,000
29............................................ 9,500 6,600
30............................................ 11,800 8,300
31............................................ 14,200 10,000
32............................................ 16,600 11,600
33............................................ 18,900 13,300
34............................................ 21,300 14,900
35............................................ 23,700 16,600
36............................................ 26,000 18,300
37............................................ 28,400 19,900
38............................................ 30,800 21,600
39............................................ 33,100 23,200
40............................................ 35,500 24,900
41............................................ 36,400 25,400
42............................................ 37,300 26,000
43............................................ 38,300 26,500
44............................................ 39,300 27,100
45............................................ 40,300 27,800
46............................................ 41,300 28,300
47............................................ 42,400 29,000
48............................................ 43,400 29,700
49............................................ 44,500 30,400
50............................................ 45,900 31,200
51............................................ 47,100 31,900
52............................................ 48,300 32,700
53............................................ 49,800 33,500
54............................................ 51,300 34,300
55............................................ 52,600 35,100
56............................................ 54,200 36,100
57............................................ 55,900 36,900
58............................................ 57,600 38,000
59............................................ 59,600 39,100
60............................................ 61,400 40,000
61............................................ 63,200 41,100
62............................................ 65,400 42,300
63............................................ 67,700 43,500
64............................................ 70,000 44,900
65 and over................................... 72,400 46,100
------------------------------------------------------------------------
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.................................... ........... ...........
26............................................ 2,400 1,700
27............................................ 4,700 3,300
28............................................ 7,100 5,000
29............................................ 9,500 6,600
30............................................ 11,800 8,300
31............................................ 14,200 10,000
32............................................ 16,600 11,600
33............................................ 18,900 13,300
34............................................ 21,300 14,900
35............................................ 23,700 16,600
36............................................ 26,000 18,300
37............................................ 28,400 19,900
38............................................ 30,800 21,600
39............................................ 33,100 23,200
40............................................ 35,500 24,900
41............................................ 36,400 25,400
42............................................ 37,300 26,000
43............................................ 38,300 26,500
44............................................ 39,300 27,100
45............................................ 40,300 27,800
46............................................ 41,300 28,300
47............................................ 42,400 29,000
48............................................ 43,400 29,700
49............................................ 44,500 30,400
50............................................ 45,900 31,200
51............................................ 47,100 31,900
52............................................ 48,300 32,700
53............................................ 49,800 33,500
54............................................ 51,300 34,300
55............................................ 52,600 35,100
56............................................ 54,200 36,100
57............................................ 55,900 36,900
58............................................ 57,600 38,000
59............................................ 59,600 39,100
60............................................ 61,400 40,000
61............................................ 63,200 41,100
62............................................ 65,400 42,300
63............................................ 67,700 43,500
64............................................ 70,000 44,900
65 and over................................... 72,400 46,100
------------------------------------------------------------------------
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. The statutory assessment schedules are as
follows:
[[Page 27764]]
Dependent Students
------------------------------------------------------------------------
If AAI is-- Then the contribution is--
------------------------------------------------------------------------
Less than -$3,409......................... -$750.
-$3,409 to $10,500........................ 22% of AAI.
$10,501 to $13,200........................ $2,310 + 25% of AAI over
$10,500.
$13,201 to $15,900........................ $2,985 + 29% of AAI over
$13,200.
$15,901 to $18,500........................ $3,768 + 34% of AAI over
$15,900.
$18,501 to $21,200........................ $4,652 + 40% of AAI over
$18,500.
$21,201 or more........................... $5,732 + 47% of AAI over
$21,200.
------------------------------------------------------------------------
Independent Students With Dependents Other Than a Spouse
------------------------------------------------------------------------
If AAI is-- Then the contribution is--
------------------------------------------------------------------------
Less than -$3,409......................... -$750.
-$3,409 to $10,500........................ 22% of AAI.
$10,501 to $13,200........................ $2,310 + 25% of AAI over
$10,500.
$13,201 to $15,900........................ $2,985 + 29% of AAI over
$13,200.
$15,901 to $18,500........................ $3,768 + 34% of AAI over
$15,900.
$18,501 to $21,200........................ $4,652 + 40% of AAI over
$18,500.
$21,201 or more........................... $5,732 + 47% of AAI over
$21,200.
------------------------------------------------------------------------
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 $2,700 or 35 percent of earned income.
6. Allowance for State and Other Taxes
The statutory 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 or 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 or 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
------------------------------------------------------------------------
[[Page 27765]]
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
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 29, 1996.
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;
84.268 William D. Ford Federal Direct Loan Program)
[FR Doc. 96-13799 Filed 5-30-96; 8:45 am]
BILLING CODE 4000-01-P