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Notice

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

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AGENCY:

Federal Student Aid, U.S. Department of Education.

ACTION:

Notice of revision of the Federal Need Analysis Methodology for the 2009-2010 award year.

SUMMARY:

The Secretary 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 2009-2010 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, Federal Perkins Loan, Federal Work-Study, Federal Supplemental Educational Opportunity Grant, Federal Family Education Loan, and William D. Ford Federal Direct Loan Programs (Title IV, HEA Programs).

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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), call the Federal Relay Service (FRS), toll free at 1-800-877-8339.

Individuals with disabilities can obtain this document in an alternative format (e.g., Braille, large print, audiotape or compact disk) on request to the contact person listed in the preceding paragraph.

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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 Title IV 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 2009-2010 the Secretary is charged with updating the income protection allowance for parents of dependent students, adjusted net worth of a business or farm, and the assessment schedules and rates to account for inflation that took place between December 2007 and December Start Printed Page 309052008. However, because the Secretary must publish these tables before December 2008, 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 2008. The Secretary estimates that the increase in the Consumer Price Index for All Urban Consumers (CPI-U) for the period December 2007 through December 2008 will be 1.7 percent. Additionally, the College Cost Reduction and Access Act (CCRAA, Pub. L. 110-84) modified the updating procedure for the income protection allowance for dependent students and the income protection allowance tables for both independent students with dependents other than a spouse and independent students without dependents other than a spouse. CCRAA established new 2009-2010 award year values for these income protection allowances. 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 2009-2010 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 family 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 2009-2010 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 $3,750. The income protection allowances for parents of dependent students for award year 2009-2010 are:

Family sizeParents of dependent students
Number in college
12345
2$15,840$13,130
319,73017,030$14,320
424,37021,66018,960$16,250
528,75026,04023,34020,630$17,940
633,63030,92028,22025,51022,820

For each additional family member, add $3,800.

For each additional college student, subtract $2,700.

The income protection allowances for independent students with dependents other than a spouse for award year 2009-10 are:

Family sizeIndependent students with dependents other than a spouse
Number in college
12345
2$17,720$14,690
322,06019,050$16,020
427,25024,22021,210$18,170
532,15029,12026,10023,070$20,060
637,60034,57031,57028,52025,520

For each additional family member, add $4,240.

For each additional college student, subtract $3,020.

The income protection allowances for single independent students and independent students without dependents other than a spouse for award year 2009-10 are:

Marital statusNumber in collegeIPA
Single1$7,000
Married27,000
Married111,220

2. Adjusted Net Worth (NW) of a Business or Farm. A portion of the full net value of a business or farm 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.

If the net worth of a business or farm is—Then the adjusted net worth is—
Less than $1$0
$1 to $115,000$0 + 40% of NW
$115,001 to $340,000$46,000 + 50% of NW over $115,000
$340,001 to $565,000$158,500 + 60% of NW over $340,000
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$565,001 or more$293,500 + 100% of NW over $565,000

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 isAnd they are
MarriedSingle
Then the education savings and asset protection allowance is—
25 or less00
262,9001,200
275,8002,400
288,7003,600
2911,6004,800
3014,5006,000
3117,4007,200
3220,3008,400
3323,1009,500
3426,00010,700
3528,90011,900
3631,80013,100
3734,70014,300
3837,60015,500
3940,50016,700
4043,40017,900
4144,20018,200
4245,30018,600
4346,40019,100
4447,60019,500
4548,70019,900
4649,90020,400
4751,20020,900
4852,40021,400
4953,70021,900
5055,30022,400
5156,70022,900
5258,00023,500
5359,80024,000
5461,20024,600
5563,00025,300
5664,90025,900
5766,40026,500
5868,30027,200
5970,30027,900
6072,30028,700
6174,40029,500
6276,60030,300
6379,10031,100
6481,30032,000
65 or older84,00032,800

 Independent Students Without Dependents Other Than a Spouse

If the age of the student isAnd they are
MarriedSingle
Then the education savings and asset protection allowance is—
25 or less00
262,9001,200
275,8002,400
288,7003,600
2911,6004,800
3014,5006,000
3117,4007,200
3220,3008,400
3323,1009,500
3426,00010,700
3528,90011,900
3631,80013,100
3734,70014,300
3837,60015,500
3940,50016,700
4043,40017,900
4144,20018,200
4245,30018,600
4346,40019,100
4447,60019,500
4548,70019,900
4649,90020,400
4751,20020,900
4852,40021,400
4953,70021,900
5055,30022,400
5156,70022,900
5258,00023,500
5359,80024,000
5461,20024,600
5563,00025,300
5664,90025,900
5766,40026,500
5868,30027,200
5970,30027,900
6072,30028,700
6174,40029,500
6276,60030,300
6379,10031,100
6481,30032,000
65 or older84,00032,800

Independent Students With Dependents Other Than a Spouse

If the age of the student isAnd they are
MarriedSingle
Then the education savings and asset protection allowance is—
25 or less00
262,9001,200
275,8002,400
288,7003,600
2911,6004,800
3014,5006,000
3117,4007,200
3220,3008,400
3323,1009,500
3426,00010,700
3528,90011,900
3631,80013,100
3734,70014,300
3837,60015,500
3940,50016,700
4043,40017,900
4144,20018,200
4245,30018,600
4346,40019,100
4447,60019,500
4548,70019,900
4649,90020,400
4751,20020,900
4852,40021,400
4953,70021,900
5055,30022,400
5156,70022,900
5258,00023,500
5359,80024,000
5461,20024,600
5563,00025,300
5664,90025,900
5766,40026,500
5868,30027,200
5970,30027,900
6072,30028,700
6174,40029,500
6276,60030,300
6379,10031,100
6481,30032,000
65 or older84,00032,800

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.Start Printed Page 30907

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 $14,20022% of AAI
$14,201 to $17,800$3,124 + 25% of AAI over $14,200
$17,801 to $21,400$4,024 + 29% of AAI over $17,800
$21,401 to $25,000$5,068 + 34% of AAI over $21,400
$25,001 to $28,600$6,292 + 40% of AAI over $25,000
$28,601 or more$7,732 + 47% of AAI over $28,600

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−$750
($3,409) to $14,20022% of AAI
$14,201 to $17,800$3,124 + 25% of AAI over $14,200
$17,801 to $21,400$4,024 + 29% of AAI over $17,800
$21,401 to $25,000$5,068 + 34% of AAI over $21,400
$25,001 to $28,600$6,292 + 40% of AAI over $25,000
$28,601 or more$7,732 + 47% of AAI over $28,600

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 $3,500 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.

StateParents of dependents and independents with dependents other than a spouseDependents and independents without dependents other than a spouse
Under $15,000 (%)$15,000 & up (%)All (%)
Alabama322
Alaska210
Arizona433
Arkansas433
California875
Colorado543
Connecticut874
Delaware433
District of Columbia766
Florida321
Georgia544
Hawaii544
Idaho543
Illinois542
Indiana433
Iowa543
Kansas543
Kentucky544
Louisiana322
Maine654
Maryland875
Massachusetts764
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Michigan543
Minnesota654
Mississippi322
Missouri543
Montana543
Nebraska543
Nevada321
New Hampshire541
New Jersey984
New Mexico323
New York986
North Carolina654
North Dakota321
Ohio654
Oklahoma433
Oregon765
Pennsylvania653
Rhode Island764
South Carolina543
South Dakota211
Tennessee211
Texas321
Utah544
Vermont543
Virginia654
Washington431
West Virginia322
Wisconsin764
Wyoming211
Other322

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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.gpoaccess.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; 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)

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Program Authority: 20 U.S.C. 1087rr.

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Dated: May 22, 2008.

Lawrence A. Warder,

Acting Chief Operating Officer, Federal Student Aid.

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[FR Doc. E8-11953 Filed 5-28-08; 8:45 am]

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