FR Doc 05-10584
[Federal Register: May 26, 2005 (Volume 70, Number 101)]
[Notices]
[Page 30425-30429]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26my05-52]
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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 2006-2007 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 2006-2007 under Part F of 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 Part F 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 (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
take into account inflation. The changes are based, in general, upon
increases in the Consumer Price Index.
[[Page 30426]]
For the award year 2006-2007 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 2004 and December 2005. However, since
the Secretary must publish these tables before December 2005, 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 2004. The Secretary estimates that the increase in the
Consumer Price Index for all urban consumers for the period December
2004 through December 2005 will be 2.3 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 on
asset protection allowance as provided for in section 478(d) of the
HEA. The Education Savings and Asset Protection Allowance table for the
award year 2006-2007 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 to account for
inflation 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 meals away from home, apparel and upkeep, transportation, and
housekeeping services. The Employment Expense Allowance table for the
award year 2006-2007 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 $2,550. The income protection allowances for parents of dependent
students and independent students with dependents other than a spouse
for award year 2006-2007 are:
----------------------------------------------------------------------------------------------------------------
Number in college
Family size ----------------------------------------------------------------
1 2 3 4 5
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2.............................................. $14,430 $11,960 ........... ........... ...........
3.............................................. 17,970 15,520 $13,050 ........... ...........
4.............................................. 22,200 19,730 17,270 $14,800 ...........
5.............................................. 26,190 23,720 21,270 18,800 $16,340
6.............................................. 30,640 28,170 25,710 23,240 20,790
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For each additional family member add $3,460.
For each additional college student subtract $2,460.
The income protection allowances for single independent students
and independent students without dependents other than a spouse for
award year 2006-2007 are:
------------------------------------------------------------------------
Number
Marital status in IPA
college
------------------------------------------------------------------------
Single................................................ 1 $5,790
Married............................................... 2 5,790
Married............................................... 1 9,260
------------------------------------------------------------------------
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 $105,000......................... $0 + 40% of NW.
$105,001 to $310,000................... $42,000 + 50% of NW over
$105,000.
$310,001 to $515,000................... $144,500 + 60% of NW over
$310,000.
$515,001 or more....................... $267,500 + 100% of NW over
$515,000.
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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.
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Dependent students
-------------------------------------------------------------------------
and there are
-------------------------
If the age of the older parent is-- two one
parents one parent
then the education
savings and asset
protection allowance is--
-----------------------------------------------
25 or less.................................... 0 0
26............................................ 2,600 1,200
27............................................ 5,200 2,400
28............................................ 7,800 3,600
29............................................ 10,500 4,800
30............................................ 13,100 6,000
31............................................ 15,700 7,200
32............................................ 18,300 8,400
33............................................ 20,900 9,600
34............................................ 23,500 10,800
35............................................ 26,100 12,000
36............................................ 28,700 13,200
37............................................ 31,400 14,400
38............................................ 34,000 15,600
39............................................ 36,600 16,800
40............................................ 39,200 18,000
[[Page 30427]]
41............................................ 40,200 18,400
42............................................ 41,200 18,800
43............................................ 42,200 19,200
44............................................ 43,200 19,700
45............................................ 44,300 20,100
46............................................ 45,400 20,600
47............................................ 46,600 21,000
48............................................ 47,700 21,500
49............................................ 48,900 22,100
50............................................ 50,100 22,600
51............................................ 51,600 23,000
52............................................ 52,900 23,600
53............................................ 54,500 24,100
54............................................ 55,800 24,800
55............................................ 57,500 25,400
56............................................ 58,900 26,000
57............................................ 60,600 26,600
58............................................ 62,400 27,400
59............................................ 64,200 28,000
60............................................ 66,100 28,800
61............................................ 68,000 29,500
62............................................ 70,000 30,300
63............................................ 72,300 31,100
64............................................ 74,400 32,000
65 or older................................... 76,900 32,900
------------------------------------------------------------------------
------------------------------------------------------------------------
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............................................ 2,600 1,200
27............................................ 5,200 2,400
28............................................ 7,800 3,600
29............................................ 10,500 4,800
30............................................ 13,100 6,000
31............................................ 15,700 7,200
32............................................ 18,300 8,400
33............................................ 20,900 9,600
34............................................ 23,500 10,800
35............................................ 26,100 12,000
36............................................ 28,700 13,200
37............................................ 31,400 14,400
38............................................ 34,000 15,600
39............................................ 36,600 16,800
40............................................ 39,200 18,000
41............................................ 40,200 18,400
42............................................ 41,200 18,800
43............................................ 42,200 19,200
44............................................ 43,200 19,700
45............................................ 44,300 20,100
46............................................ 45,400 20,600
47............................................ 46,600 21,000
48............................................ 47,700 21,500
49............................................ 48,900 22,100
50............................................ 50,100 22,600
51............................................ 51,600 23,000
52............................................ 52,900 23,600
53............................................ 54,500 24,100
54............................................ 55,800 24,800
55............................................ 57,500 25,400
56............................................ 58,900 26,000
57............................................ 60,600 26,600
58............................................ 62,400 27,400
59............................................ 64,200 28,000
60............................................ 66,100 28,800
61............................................ 68,000 29,500
62............................................ 70,000 30,300
63............................................ 72,300 31,100
64............................................ 74,400 32,000
65 or older................................... 76,900 32,900
------------------------------------------------------------------------
------------------------------------------------------------------------
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............................................ 2,600 1,200
27............................................ 5,200 2,400
28............................................ 7,800 3,600
29............................................ 10,500 4,800
30............................................ 13,100 6,000
31............................................ 15,700 7,200
32............................................ 18,300 8,400
33............................................ 20,900 9,600
34............................................ 23,500 10,800
35............................................ 26,100 12,000
36............................................ 28,700 13,200
37............................................ 31,400 14,400
38............................................ 34,000 15,600
39............................................ 36,600 16,800
40............................................ 39,200 18,000
41............................................ 40,200 18,400
42............................................ 41,200 18,800
43............................................ 42,200 19,200
44............................................ 43,200 19,700
45............................................ 44,300 20,100
46............................................ 45,400 20,600
47............................................ 46,600 21,000
48............................................ 47,700 21,500
49............................................ 48,900 22,100
50............................................ 50,100 22,600
51............................................ 51,600 23,000
52............................................ 52,900 23,600
53............................................ 54,500 24,100
54............................................ 55,800 24,800
55............................................ 57,500 25,400
56............................................ 58,900 26,000
57............................................ 60,600 26,600
58............................................ 62,400 27,400
59............................................ 64,200 28,000
60............................................ 66,100 28,800
61............................................ 68,000 29,500
62............................................ 70,000 30,300
63............................................ 72,300 31,100
64............................................ 74,400 32,000
65 or older................................... 76,900 32,900
------------------------------------------------------------------------
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:
------------------------------------------------------------------------
If AAI is-- Then the contribution is--
------------------------------------------------------------------------
Less than -$3,409.................... -$750
-$3,409 to $12,900................... -22% of AAI.
$12,901 to $16,200................... $2,838 + 25% of AAI over $12,900.
$16,201 to $19,500................... $3,663 + 29% of AAI over $16,200.
$19,501 to $22,800................... $4,620 + 34% of AAI over $19,500.
$22,801 to $26,100................... $5,742 + 40% of AAI over $22,800.
$26,101 or more...................... $7,062 + 47% of AAI over $26,100.
------------------------------------------------------------------------
The contribution for an independent student with dependents other
than a spouse is computed according to the following schedule:
[[Page 30428]]
------------------------------------------------------------------------
If AAI is-- Then the contribution is--
------------------------------------------------------------------------
Less than -$3,409.................... -$750
-$3,409 to $12,900................... 22% of AAI.
$12,901 to $16,200................... $2,838 +25% of AAI over $12,900.
$16,201 to $19,500................... $3,663+29% of AAI over $16,200.
$19,501 to $22,800................... $4,620+34% of AAI over $19,500.
$22,801 to $26,100................... $5,742+40% of AAI over $22,800.
$26,101 or more...................... $7,062+47% of AAI over $26,100.
------------------------------------------------------------------------
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 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 $3,100 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 tables 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 part F of the HEA
directs the Secretary to update the tables for State and other taxes
after reviewing the Statistics of Income file data. Also, a provision
in the Consolidated Appropriations Act, 2004 (Pub. L. 108-199), directs
the Advisory Committee on Student Financial Assistance to examine the
efficiency, effectiveness and fairness of the current procedures to
update formula offsets and allowances. The Secretary considered the
preliminary findings of this analysis as she reviewed the Statistics of
Income file data.
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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 ------------------
All
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Alabama................................................ 3 2 2
Alaska................................................. 2 1 0
Arizona................................................ 4 3 2
Arkansas............................................... 3 2 3
California............................................. 7 6 5
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 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.............................................. 2 1 2
Maine.................................................. 6 5 4
Maryland............................................... 7 6 5
Massachusetts.......................................... 6 5 4
Michigan............................................... 5 4 3
Minnesota.............................................. 6 5 4
Mississippi............................................ 3 2 2
Missouri............................................... 4 3 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................................................. 7 6 5
[[Page 30429]]
Pennsylvania........................................... 5 4 3
Rhode Island........................................... 7 6 4
South Carolina......................................... 5 4 3
South Dakota........................................... 1 0 0
Tennessee.............................................. 1 0 0
Texas.................................................. 2 1 0
Utah................................................... 5 4 4
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 2
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Regulations is available on GPO Access at:
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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)
Dated: May 23, 2005.
Theresa S. Shaw,
Chief Operating Officer, Federal Student Aid.
[FR Doc. 05-10584 Filed 5-25-05; 8:45 am]
BILLING CODE 4000-01-P