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Notice

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

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Start Preamble

AGENCY:

Student Financial Assistance, Department of Education.

ACTION:

Notice of revision of the Federal need analysis methodology for the 2002-2003 award year.

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 2002-2003 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.

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FOR FURTHER INFORMATION CONTACT:

Ms. Edith Bell, Program Specialist, U.S. Department of Education, 400 Maryland Avenue, SW (Room 4621, ROB-3), Washington, DC 20202-5444. Telephone: (202) 708-5591. 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 in the preceding paragraph.

End Further Info End Preamble Start Supplemental Information

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 2002-2003 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 2000 and December 2001. However, since the Secretary must publish these tables before December 2001, 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 2000. The Secretary estimates that the increase in the Consumer Price Index for all Urban Consumers for the period December 2000 through December 2001 will be 2.4 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 2002-2003 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. The income protection allowance for the dependent student is $2,330. The income protection allowances for parents of dependent students and independent students with dependents other than a spouse for award year 2002-2003 are:

Number in college
12345
Family size
213,21010,950
316,45014,21011,940
420,32018,06015,81013,550
523,98021,72019,47017,21014,960
628,05025,79023,54021,28019,030
For each additional family member add $3,170.
For each additional college student subtract $2,250.

The income protection allowances for independent students and independent students without dependents other than a spouse for award year 2002-2003 are:

Marital statusNumber in collegeAmount
Single1$5,300
Married25,300
Married18,470

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 Start Printed Page 29559formula 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, independent student without dependents other than a spouse, and independent students with dependents other than a spouse.

If the Net Worth of a Business or Farm is—Then the Adjusted Net Worth is—
Less than      $1   $0
   $1 to $95,000   $0 + 40% of NW
$95,001 to $285,000$38,000 + 50% of NW over $95,000
$285,001 to $470,000$133,000 + 60% of NW over $285,000
$470,001 or more$244,000 + 100% of NW over $470,000

3. Education Savings and Asset Protection Allowance

This allowance protects a portion of net worth (assets less debts) from being considered available for postsecondary educational expenses. There are three asset protection allowance tables—one for parents of dependent students, one for independent students without dependents other than a spouse, and one for independent students with dependents other than a spouse.

Dependent Students

If the age of the older parent is—And there are—
Two parentsOne parent
Then the education savings and asset protection allowance is—
25 or less00
262,3001,100
274,6002,200
286,9003,300
299,1004,500
3011,4005,600
3113,7006,700
3216,0007,800
3318,3008,900
3420,60010,000
3522,90011,100
3625,20012,200
3727,40013,400
3829,70014,500
3932,00015,600
4034,30016,700
4135,20017,000
4236,10017,400
4336,70017,800
4437,70018,200
4538,60018,600
4639,60018,900
4740,60019,400
4841,90019,900
4942,90020,300
5044,00020,800
5145,10021,200
5246,50021,700
5347,60022,400
5449,10022,900
5550,30023,400
5651,80024,000
5753,30024,700
5854,90025,300
5956,60026,000
6058,30026,600
6160,00027,400
6262,00028,100
6363,80028,900
6466,00029,700
65 and over68,20030,700

Independent Students Without Dependents Other Than a Spouse

If the age of the student is—And the student is—
MarriedSingle
Then the education savings and asset protection allowance is—
25 or less00
262,3001,100
274,6002,200
286,9003,300
299,1004,500
3011,4005,600
3113,7006,700
3216,0007,800
3318,3008,900
3420,60010,000
3522,90011,100
3625,20012,200
3727,40013,400
3829,70014,500
3932,00015,600
4034,30016,700
4135,20017,000
4236,10017,400
4336,70017,800
4437,70018,200
4538,60018,600
4639,60018,900
4740,60019,400
4841,90019,900
4942,90020,300
5044,00020,800
5145,10021,200
5246,50021,700
5347,60022,400
5449,10022,900
5550,30023,400
5651,80024,000
5753,30024,700
5854,90025,300
5956,60026,000
6058,30026,600
6160,00027,400
6262,00028,100
6363,80028,900
6466,00029,700
65 and over68,20030,700

Independent Students With Dependents Other Than a Spouse

If the age of the student is—And the student is—
MarriedSingle
Then the education savings and asset protection allowance is—
25 or less00
262,3001,100
274,6002,200
286,9003,300
299,1004,500
3011,4005,600
3113,7006,700
3216,0007,800
3318,3008,900
3420,60010,000
3522,90011,100
3625,20012,200
3727,40013,400
3829,70014,500
3932,00015,600
4034,30016,700
4135,20017,000
4236,10017,400
4336,70017,800
4437,70018,200
4538,60018,600
4639,60018,900
4740,60019,400
4841,90019,900
4942,90020,300
5044,00020,800
5145,10021,200
5246,50021,700
5347,60022,400
5449,10022,900
5550,30023,400
5651,80024,000
5753,30024,700
5854,90025,300
5956,60026,000
6058,30026,600
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6160,00027,400
6262,00028,100
6363,80028,900
6466,00029,700
65 and over68,20030,700

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 $11,800       22% of AAI
$11,801 to $14,800$2,596 + 25% of AAI over $11,800
$14,801 to $17,800$3,346 + 29% of AAI over $14,800
$17,801 to $20,800$4,216 + 34% of AAI over $17,800
$20,801 to $23,900$5,236 + 40% of AAI over $20,800
$23,901 or more$6,476 + 47% of AAI over $23,900

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 $11,800 22% of AAI
$11,801 to $14,800$2,596 + 25% of AAI over $11,800
$14,801 to $17,800$3,346 + 29% of AAI over $14,800
$17,801 to $20,800$4,216 + 34% of AAI over $17,800
$20,801 to $23,900$5,236 + 40% of AAI over $20,800
$23,901 or more$6,476 + 47% of AAI over $23,900

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 students, independent students with dependents other than a spouse, dependent students, and independent students without dependents other than a spouse.

Parents of Dependent Students

If parents' State or territory of residence is—And parents' total income is—
Less than $15,000$15,000 or more
Then the percentage is—
Wyoming, Tennessee, Nevada, Alaska, Texas32
Louisiana, Florida, Washington, South Dakota43
Alabama, Mississippi54
North Dakota, Illinois, Connecticut, New Mexico, Missouri, West Virginia, Arizona, Indiana, Oklahoma, Arkansas65
New Hampshire, Pennsylvania, Colorado, Georgia, Kansas, Kentucky, Idaho76
North Carolina, Virginia, Delaware, South Carolina, Ohio, Utah, Nebraska, Montana, California, New Jersey, Iowa, Vermont, Hawaii87
Massachusetts, Rhode Island, Michigan, Minnesota, Maine, Maryland98
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District of Columbia, Wisconsin, Oregon109
New York1110
Other43

Independent Students With Dependents Other Than a Spouse

If student's State or territory of residence is—And student's total income is—
Less than $15,000$15,000 or more
Then the percentage is—
Wyoming, Tennessee, Nevada, Alaska, Texas32
Louisiana, Florida, Washington, South Dakota43
Alabama, Mississippi54
North Dakota, Illinois, Connecticut, New Mexico, Missouri, West Virginia, Arizona, Indiana, Oklahoma, Arkansas65
New Hampshire, Pennsylvania, Colorado, Georgia, Kansas, Kentucky, Idaho76
North Carolina, Virginia, Delaware, South Carolina, Ohio, Utah, Nebraska, Montana, California, New Jersey, Iowa, Vermont, Hawaii87
Massachusetts, Rhode Island, Michigan, Minnesota, Maine, Maryland98
District of Columbia, Wisconsin, Oregon109
New York1110
Other43

 Dependent Students

If student's State or territory of residence is—The percentage is—
Alaska, Texas, South Dakota, Wyoming, Washington, Tennessee, Nevada0
Florida, New Hampshire1
Connecticut, Louisiana, Illinois, North Dakota2
Mississippi, Arizona, Alabama, Pennsylvania, New Jersey, Missouri3
Nebraska, Indiana, Colorado, New Mexico, Oklahoma, Kansas, West Virginia, Rhode Island, Virginia, Georgia, Arkansas, Vermont, Michigan4
Montana, Idaho, Utah, Kentucky, Massachusetts, California, North Carolina, South Carolina, Ohio, Iowa, Delaware, Maine, Wisconsin5
Oregon, Maryland, Minnesota, Hawaii6
District of Columbia, New York7
Other2

Independent Students Without Dependents Other Than a Spouse

If student's State or territory of residence is—The percentage is—
Alaska, Texas, South Dakota, Wyoming, Washington, Tennessee, Nevada0
Florida, New Hampshire1
Connecticut, Louisiana, Illinois, North Dakota2
Mississippi, Arizona, Alabama, Pennsylvania, New Jersey, Missouri3
Nebraska, Indiana, Colorado, New Mexico, Oklahoma, Kansas, West Virginia, Rhode Island, Virginia, Georgia, Arkansas, Vermont, Michigan4
Montana, Idaho, Utah, Kentucky, Massachusetts, California, North Carolina, South Carolina, Ohio, Iowa, Delaware, Maine, Wisconsin5
Oregon, Maryland, Minnesota, Hawaii6
District of Columbia, New York7
Other2

Electronic Access to This Document

You may view this document, as well as all other Department of Education documents published in the Federal Register, in text or Adobe Portable Document Format (PDF) on the Internet at the following site: www.ed.gov/​legislation/​FedRegister

To use the PDF you must have Adobe Acrobat Reader, which is available free at this site. If you have questions about using the PDF, call the U.S. Government Start Printed Page 29562Printing Office (GPO), toll free, at 1-888-293-6498; or in Washington, DC, area at (202) 512-1530.

Note:

The official version of this document is the document published in the Federal Register. Free Internet access to the official edition of the Federal Register and the Code of Federal Regulations is available on GPO Access at: http://www.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)

Start Signature

Dated: May 25, 2001.

Greg Woods,

Chief Operating Officer, Student Financial Assistance.

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[FR Doc. 01-13636 Filed 5-30-01; 8:45am]

BILLING CODE 4000-01-P