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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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AGENCY:

Federal Student Aid, Department of Education.

ACTION:

Notice of revision of the Federal need analysis Methodology for the 2003-2004 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 2003-2004 under Part F of Title IV of the Higher Education Act (HEA) of 1965, as amended, Title IV, HEA Programs. An EFC is the amount a student and his or her family may reasonably be expected to contribute toward the student's postsecondary educational costs for purposes of determining financial aid eligibility. The Title IV, HEA Programs include the Federal Pell Grant, campus-based (Federal Perkins Loan, Federal Work-Study, and Federal Supplemental Educational Opportunity Grant Programs), Federal Family Education Loan, and William D. Ford Federal Direct Loan Programs.

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FOR FURTHER INFORMATION CONTACT:

Ms. Edith Bell, Management and Program Analyst, U.S. Department of Education, Federal Student Aid, Union Center Plaza, 830 First Street NE, Washington, DC 20002-5345. Telephone: (202) 377-3231.

If you use a telecommunications device for the deaf (TDD), you may call the Federal Information Relay Service (FIRS) at 1-800-877-8339.

Individuals with disabilities may obtain this document in an alternative format (e.g., Braille, large print, audiotape or computer diskette) on request to the contact person listed under FOR FURTHER INFORMATION CONTACT.

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SUPPLEMENTARY INFORMATION:

Part F of Title IV of the HEA specifies the criteria, data elements, calculations,and tables used in the Federal Need Analysis Methodology EFC calculations.

Section 478 of Part F of the HEA requires the Secretary to adjust four of the tables—the Income Protection Allowance, the Adjusted Net Worth of a Business or Farm, the Education Savings and Asset Protection Allowance, and the Assessment Schedules and Rates—each award year to take into account inflation. The changes are based, in general, upon increases in the Consumer Price Index.

For the award year 2003-2004 the Secretary is charged with updating the income protection allowance, adjusted net worth of a business or farm, and the assessment schedules and rates to account for inflation that took place between December 2001 and December 2002. However, since the Secretary must publish these tables before December 2002, the increases in the tables must be based upon a percentage equal to the estimated percentage increase in the Consumer Price Index for all Urban Consumers for 2001. The Secretary estimates that the increase in the Consumer Price Index for all urban Consumers for the period December 2001 through December 2002 will be 2.8 percent. The updated tables are in sections 1, 2, and 4 of this notice.

The Secretary must also revise, for each award year, the table of asset protection allowances as provided for in section 478 (d) of the HEA. The Education Savings and Asset Protection Allowance table for the award year 2003-2004 has been updated in section 3 of this notice.

Section 477(B)(5) of Part F of the HEA also requires the Secretary to increase the amount specified for the Employment Expense Allowance to account for inflation based upon increases in the Bureau of Labor Statistics budget of the marginal costs for a two-earner compared to a one-earner family for meals away from home, apparel and upkeep, transportation, and housekeeping services. Therefore, the Secretary is increasing this allowance as described in section 5 of this notice.

The HEA provides for the following annual updates:

1. Income Protection Allowance. This allowance is the amount of living expenses associated with the maintenance of an individual or family that may be offset against the family's income. It varies by family size and number in college. The income protection allowance for the dependent student is $2,380. The income protection allowances for parents of dependent students and independent students with dependents other than a spouse for award year 2003-2004 are:Start Printed Page 38080

Number in College—
12345
Family size:
213,47011,160
316,77014,48012,170
420,71018,41016,12013,810
524,44022,13019,84017,54015,240
628,58026,28023,90021,68019,390
For each additional family member add $3,230.
For each additional college student substract $2,290.

The income protection allowances for single independent students and for independent students without dependents other than a spouse for award year 2003-2004 are:

Marital statusNumber in collegeAmount
Single1$5,400
Married25,400
Married18,640

2. Adjusted Net Worth (NW) of a Business or Farm. A portion of the full net value of a farm or business is excluded from the calculation of an expected contribution since—(1) the income produced from these assets is already assessed in another part of the formula; and (2) the formula protects a portion of the value of the assets. The portion of these assets included in the contribution calculation is computed according to the following schedule.

This schedule is used for parents of dependent students, independent students without dependents other than a spouse, and independent students with dependents other than a spouse.

If the net worth of a business or farm is—Then the adjusted net worth is—
Less than $1$0
$1 to $95,000$0 + 40% of NW
$95,001 to $290,000$38,000 + 50% of NW over $95,000
$290,001 to $480,000$135,000 + 60% of NW over $290,000
$480,001 or more$249,500 + 100% of NW over $480,000

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

Dependent Students

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
262,5001,200
275,0002,500
287,5003,700
299,9005,000
3012,4006,200
3114,9007,400
3217,4008,700
3319,9009,900
3422,40011,200
3524,90012,400
3627,40013,600
3729,80014,900
3832,30016,100
3934,80017,400
4037,30018,600
4138,20019,000
4239,20019,400
4340,20019,800
4441,20020,300
4542,20020,700
4643,30021,100
4744,30021,600
4845,40022,200
4946,60022,600
5047,70023,100
5149,20023,700
5250,40024,200
5351,70024,800
5453,20025,400
5554,50026,200
5656,20026,800
5757,90027,400
5859,60028,200
5961,40028,900
6063,20029,700
6165,10030,500
6267,30031,200
6369,20032,100
6471,60033,100
65 and over74,00034,100

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
262,5001,200
275,0002,500
287,5003,700
299,9005,000
3012,4006,200
3114,9007,400
3217,4008,700
3319,9009,900
3422,40011,200
3524,90012,400
3627,40013,600
3729,80014,900
3832,30016,100
3934,80017,400
4037,30018,600
4138,20019,000
4239,20019,400
4340,20019,800
4441,20020,300
4542,20020,700
4643,30021,100
4744,30021,600
4845,40022,200
4946,60022,600
5047,70023,100
5149,20023,700
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5250,40024,200
5351,70024,800
5453,20025,400
5554,50026,200
5656,20026,800
5757,90027,400
5859,60028,200
5961,40028,900
6063,20029,700
6165,10030,500
6267,30031,200
6369,20032,100
6471,60033,100
65 and over74,00034,100

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
262,5001,200
275,0002,500
287,5003,700
299,9005,000
3012,4006,200
3114,9007,400
3217,4008,700
3319,9009,900
3422,40011,200
3524,90012,400
3627,40013,600
3729,80014,900
3832,30016,100
3934,80017,400
4037,30018,600
4138,20019,000
4239,20019,400
4340,20019,800
4441,20020,300
4542,20020,700
4643,30021,100
4744,30021,600
4845,40022,200
4946,60022,600
5047,40023,100
5149,20023,700
5250,40024,200
5351,70024,800
5453,20025,400
5554,50026,200
5656,20026,800
5757,90027,400
5859,60028,200
5961,40028,900
6063,20029,700
6165,10030,500
6267,30031,200
6369,20032,100
6471,60033,100
65 and over74,00034,100

4. Assessment Schedules and Rates. Two schedules that are subject to updates, one for dependent students and one for independent students with dependents other than a spouse, are used to determine the expected contribution toward educational expenses from family financial resources. For dependent students, the expected parental contribution is derived from an assessment of the parents adjusted available income (AAI). For independent students with dependents other than a spouse, the expected contribution is derived from an assessment of the family's AAI. The AAI represents a measure of a family's financial strength, which considers both income and assets.

The parents' contribution for a dependent student is computed according to the following schedule:

If AAI is—Then the contribution is—
Less than −$3,409 ($3,409)−$750
($3,409) to $12,00022% of AAI
$12,001 to $15,100$2,640 +25% of AAI over $12,000
$15,101 to $18,200$3,415 +29% of AAI over $15,100
$18,201 to $21,200$4,314 +34% of AAI over $18,200
$21,201 to $24,300$5,334 +40% of AAI over $21,200
$24,301 or more$6,574 +47% of AAI over $24,300

The contribution for an independent student with dependents other than a spouse is computed according to the following schedule:

If AAI is—Then the contribution is—
Less than −$3,409 ($3,409)−$750
($3,409) to $12,00022% of AAI
$12,001 to $15,100$2,640 +25% of AAI over $12,000
$15,101 to $18,200$3,415 +29% of AAI over $15,100
$18,201 to $21,200$4,314 +34% of AAI over $18,200
$21,201 to $24,300$5,334 +40% of AAI over $21,200
$24,301 or more$6,574 +47% of AAI over $24,300

5. Employment Expense Allowance. This allowance for employment-related expenses, which is used for the parents of dependent students and for married independent students with dependents, recognizes additional expenses incurred by working spouses and single-parent households. The allowance is based upon the marginal differences in costs for a two wage-earner family compared to a one-wage earner family for meals away from home, apparel and upkeep, transportation, and housekeeping services.

The employment expense allowance for parents of dependent students, married independent students without dependents other than a spouse, and independent students with dependents other than a spouse is the lesser of $3,000 or 35 percent of earned income.

6. Allowance for State and Other Taxes. This allowance for State and other taxes protects a portion of the parents' and student's income from being considered available for postsecondary educational expenses. There are four tables for State and other taxes, one each for parents of dependent Start Printed Page 38082students, 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
District of Columbia, Wisconsin, Oregon109
New York1110
Other43

Independent Students With Dependents Other Than a Spouse

If student's State or territory for 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
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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

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Note:

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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; William D. Ford Federal Direct Loan Program, 84.268)

Dated: May 28, 2002.

Candy Kane,

Acting Chief Operating Officer, Federal Student Aid.

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[FR Doc. 02-13704 Filed 5-30-02; 8:45 am]

BILLING CODE 4000-01-M