FR Doc E6-8403
[Federal Register: May 31, 2006 (Volume 71, Number 104)]
[Notices]
[Page 30899-30903]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31my06-67]
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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, Department of Education.
ACTION: Notice of revision of the Federal Need Analysis Methodology for
the 2007-2008 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 2007-2008 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, 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 (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), you may call
the Federal Relay Service (FRS) at 1-800-877-8339.
Individuals with disabilities may obtain this document in an
alternative format (e.g., Braille, large print, audiotape or computer
diskette) on request to the contact person listed in the preceding
paragraph.
SUPPLEMENTARY INFORMATION: Part F of Title IV of the HEA specifies the
criteria, data elements, calculations, and tables used in the Federal
Need Analysis Methodology EFC calculations.
Section 478 of Part F of the HEA requires the Secretary to adjust
four of the tables--the Income Protection Allowance, the Adjusted Net
Worth of a Business or Farm, the Education Savings and Asset Protection
Allowance, and the Assessment Schedules and Rates--each award year to
adjust for general price inflation. The changes are based, in general,
upon increases in the Consumer Price Index.
For award year 2007-2008 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 2005 and December 2006. However, because
the Secretary must publish these tables before December 2006, 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 2005. The Secretary estimates that the increase in the
Consumer Price Index for All Urban Consumers (CPI-U) for the period
December 2005 through December 2006 will be 2.8 percent. Additionally,
the Higher Education Reconciliation Act of 2005 (Pub. L. 109-171)
modified the updating procedure for the income protection allowance
table for independent students with dependents other than a spouse.
These table values are increased by the greater of 5 percent or the
Secretary's estimated increase in the CPI-U (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 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 2007-2008 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 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 2007-2008 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 $3,000. The income protection allowances for parents of dependent
students for award year 2007-2008 is:
Parents of Dependent Students
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Number in college
Family size ----------------------------------------------------------------
1 2 3 4 5
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2.............................................. $15,000 $12,430 ........... ........... ...........
3.............................................. 18,680 16,130 $13,560 ........... ...........
[[Page 30900]]
4.............................................. 23,070 20,510 17,950 $15,390 ...........
5.............................................. 27,220 24,660 22,100 19,540 $16,980
6.............................................. 31,840 29,280 26,720 24,160 21,600
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For each additional family member add $3,590.
For each additional college student subtract $2,550.
The income protection allowances for independent students with
dependents other than a spouse for award year 2007-2008 is:
Independent Students With Dependents Other Than a Spouse
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Number in college
Family size ----------------------------------------------------------------
1 2 3 4 5
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2.............................................. $15,320 $12,700 ........... ........... ...........
3.............................................. 19,070 16,470 $13,850 ........... ...........
4.............................................. 23,560 20,940 18,330 $15,710 ...........
5.............................................. 27,800 25,170 22,570 19,950 $17,340
6.............................................. 32,510 29,890 27,290 24,660 22,060
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For each additional family member add $3,670.
For each additional college student subtract $2,610.
The income protection allowances for single independent students
and independent students without dependents other than a spouse for
award year 2007-2008 are:
------------------------------------------------------------------------
Number in
Marital status college IPA
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Single........................................ 1 $6,050
Married....................................... 2 6,050
Married....................................... 1 9,700
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2. Adjusted Net Worth (NW) of a Business or Farm. A portion of the
full net value of a farm or business is excluded from the calculation
of an expected contribution 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.
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If the net worth of a business or farm is-- Then the adjusted net worth is--
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Less than $1.................................... $0
$1 to $105,000.................................. $0 + 40% of NW.
$105,001 to $320,000............................ $42,000 + 50% of NW over $105,000.
$320,001 to $535,000............................ $149,500 + 60% of NW over $320,000.
$535,001 or more................................ $278,500 + 100% of NW over $535,000.
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3. Education Savings and Asset Protection Allowance. This allowance
protects a portion of net worth (assets less debts) from being
considered available for postsecondary educational expenses. There are
three asset protection allowance tables--one for parents of dependent
students, one for independent students without dependents other than a
spouse, and one for independent students with dependents other than a
spouse.
Dependent Students
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And there are
-------------------------
Two parents One parent
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If the age of the older parent is--
then the education
savings and asset
protection allowance is--
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25 or less.................................... 0 0
26............................................ 2,500 1,000
27............................................ 5,100 2,100
28............................................ 7,600 3,100
29............................................ 10,200 4,200
30............................................ 12,700 5,200
31............................................ 15,200 6,300
32............................................ 17,800 7,300
33............................................ 20,300 8,400
34............................................ 22,900 9,400
35............................................ 25,400 10,500
36............................................ 27,900 11,500
37............................................ 30,500 12,600
38............................................ 33,000 13,600
39............................................ 35,600 14,700
40............................................ 38,100 15,700
41............................................ 39,100 16,100
[[Page 30901]]
42............................................ 40,100 16,400
43............................................ 41,100 16,800
44............................................ 42,100 17,200
45............................................ 43,100 17,500
46............................................ 44,200 17,900
47............................................ 45,300 18,300
48............................................ 46,400 18,800
49............................................ 47,600 19,200
50............................................ 48,700 19,700
51............................................ 50,200 20,100
52............................................ 51,500 20,500
53............................................ 53,000 21,000
54............................................ 54,300 21,600
55............................................ 55,900 22,100
56............................................ 57,300 22,700
57............................................ 59,000 23,200
58............................................ 60,700 23,900
59............................................ 62,500 24,400
60............................................ 64,300 25,100
61............................................ 66,200 25,700
62............................................ 68,100 26,400
63............................................ 70,400 27,200
64............................................ 72,400 27,900
65 or older................................... 74,800 28,700
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Independent Students Without Dependents Other Than a Spouse
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And they are
-------------------------
Married Single
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If the age of the student is--
then the education
savings and asset
protection allowance is--
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25 or less.................................... 0 0
26............................................ 2,500 1,000
27............................................ 5,100 2,100
28............................................ 7,600 3,100
29............................................ 10,200 4,200
30............................................ 12,700 5,200
31............................................ 15,200 6,300
32............................................ 17,800 7,300
33............................................ 20,300 8,400
34............................................ 22,900 9,400
35............................................ 25,400 10,500
36............................................ 27,900 11,500
37............................................ 30,500 12,600
38............................................ 33,000 13,600
39............................................ 35,600 14,700
40............................................ 38,100 15,700
41............................................ 39,100 16,100
42............................................ 40,100 16,400
43............................................ 41,100 16,800
44............................................ 42,100 17,200
45............................................ 43,100 17,500
46............................................ 44,200 17,900
47............................................ 45,300 18,300
48............................................ 46,400 18,800
49............................................ 47,600 19,200
50............................................ 48,700 19,700
51............................................ 50,200 20,100
52............................................ 51,500 20,500
53............................................ 53,000 21,000
54............................................ 54,300 21,600
55............................................ 55,900 22,100
56............................................ 57,300 22,700
57............................................ 59,000 23,200
58............................................ 60,700 23,900
59............................................ 62,500 24,400
60............................................ 64,300 25,100
61............................................ 66,200 25,700
62............................................ 68,100 26,400
63............................................ 70,400 27,200
64............................................ 72,400 27,900
65 or older................................... 74,800 28,700
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Independent Students With Dependents Other Than A Spouse
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And they are
If the age of the student is-- -------------------------
married single
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then the education
savings and asset
protection allowance is--
-------------------------
25 or less.................................... 0 0
26............................................ 2,500 1,000
27............................................ 5,100 2,100
28............................................ 7,600 3,100
29............................................ 10,200 4,200
30............................................ 12,700 5,200
31............................................ 15,200 6,300
32............................................ 17,800 7,300
33............................................ 20,300 8,400
34............................................ 22,900 9,400
35............................................ 25,400 10,500
36............................................ 27,900 11,500
37............................................ 30,500 12,600
38............................................ 33,000 13,600
39............................................ 35,600 14,700
40............................................ 38,100 15,700
41............................................ 39,100 16,100
42............................................ 40,100 16,400
43............................................ 41,100 16,800
44............................................ 42,100 17,200
45............................................ 43,100 17,500
46............................................ 44,200 17,900
47............................................ 45,300 18,300
48............................................ 46,400 18,800
49............................................ 47,600 19,200
50............................................ 48,700 19,700
51............................................ 50,200 20,100
52............................................ 51,500 20,500
53............................................ 53,000 21,000
54............................................ 54,300 21,600
55............................................ 55,900 22,100
56............................................ 57,300 22,700
57............................................ 59,000 23,200
58............................................ 60,700 23,900
59............................................ 62,500 24,400
60............................................ 64,300 25,100
61............................................ 66,200 25,700
62............................................ 68,100 26,400
63............................................ 70,400 27,200
64............................................ 72,400 27,900
65 or older................................... 74,800 28,700
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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.
The parents' contribution for a dependent student is computed
according to the following schedule:
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If AAI is-- Then the contribution is--
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Less than -$3,409............................... -$750
-$3,409 to $13,400.............................. 22% of AAI
$13,401 to $16,800.............................. $2,948 + 25% of AAI over $13,400
$16,801 to $20,200.............................. $3,798 + 29% of AAI over $16,800
$20,201 to $23,700.............................. $4,784 + 34% of AAI over $20,200
$23,701 to $27,100.............................. $5,974 + 40% of AAI over $23,700
$27,101 or more................................. $7,334 + 47% of AAI over $27,100
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The contribution for an independent student with dependents other
than a spouse is computed according to the following schedule:
[[Page 30902]]
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If AAI is-- Then the contribution is--
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Less than -$3,409............................... -$750
-$3,409 to $13,400.............................. 22% of AAI
$13,401 to $16,800.............................. $2,948 + 25% of AAI over $13,400
$16,801 to $20,200.............................. $3,798 + 29% of AAI over $16,800
$20,201 to $23,700.............................. $4,784 + 34% of AAI over $20,200
$23,701 to $27,100.............................. $5,974 + 40% of AAI over $23,700
$27,101 or more................................. $7,334 + 47% of AAI over $27,100
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5. Employment Expense Allowance. This allowance for employment-
related expenses, which is used for the parents of dependent students
and for married independent students, 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 $3,200 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.
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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 ------------------
(Percent) (Percent) All (Percent)
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Alabama................................................ 3 2 2
Alaska................................................. 2 1 0
Arizona................................................ 4 3 2
Arkansas............................................... 4 3 3
California............................................. 7 6 4
Colorado............................................... 4 3 3
Connecticut............................................ 7 6 4
Delaware............................................... 4 3 3
District of Columbia................................... 7 6 6
Florida................................................ 2 1 0
Georgia................................................ 5 4 3
Hawaii................................................. 4 3 3
Idaho.................................................. 5 4 3
Illinois............................................... 5 4 2
Indiana................................................ 4 3 2
Iowa................................................... 5 4 3
Kansas................................................. 5 4 3
Kentucky............................................... 5 4 4
Louisiana.............................................. 2 1 2
Maine.................................................. 6 5 3
Maryland............................................... 7 6 5
Massachusetts.......................................... 6 5 4
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................................................. 2 1 1
New Hampshire.......................................... 4 3 1
New Jersey............................................. 8 7 4
New Mexico............................................. 4 3 3
New York............................................... 8 7 5
North Carolina......................................... 6 5 4
North Dakota........................................... 2 1 1
Ohio................................................... 6 5 4
Oklahoma............................................... 4 3 3
Oregon................................................. 8 7 5
Pennsylvania........................................... 5 4 3
Rhode Island........................................... 7 6 4
South Carolina......................................... 5 4 3
[[Page 30903]]
South Dakota........................................... 1 0 0
Tennessee.............................................. 1 0 0
Texas.................................................. 2 1 0
Utah................................................... 5 4 3
Vermont................................................ 6 5 3
Virginia............................................... 5 4 3
Washington............................................. 2 1 0
West Virginia.......................................... 3 2 2
Wisconsin.............................................. 7 6 4
Wyoming................................................ 1 0 0
Other.................................................. 3 2 3
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(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)
Dated: May 25, 2006.
Theresa S. Shaw,
Chief Operating Officer, Federal Student Aid.
[FR Doc. E6-8403 Filed 5-30-06; 8:45 am]
BILLING CODE 4000-01-P