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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 2010-2011 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 2010-2011 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, 63G2, 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 accessible format (e.g., braille, large print, audiotape or compact disk) on request to the contact person listed under FOR FURTHER INFORMATION CONTACT.

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 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 for general price inflation. The changes are based, in general, upon increases in the Consumer Price Index.

For award year 2010-2011 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 2008 and December 2009. However, because the Secretary must publish these tables before December 2009, 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 2009. The Secretary estimates that the increase in the Consumer Price Index for All Urban Consumers (CPI-U) for the period December 2008 through December 2009 will be 4.1 percent. Additionally, section 601 of the College Cost Reduction and Access Act of 2007 (CCRAA, Pub. L. 110-84) amended sections 475 through 478 of the HEA by updating the procedures for determining the income protection allowance for dependent students as well as the income protection allowance tables for both independent students with dependents other than a spouse and independent students without dependents other than a spouse. As amended by the CCRAA, the HEA established new 2010-2011 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 2010-2011 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 2010-2011 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 $4,500. The income protection allowances for parents of dependent students for award year 2010-2011 are: Start Printed Page 26380

Parents of Dependent Students

[Number in college]

Family Size12345
2$16,230$13,450
320,21017,450$14,670
424,97022,19019,430$16,650
529,46026,68023,92021,140$18,380
634,46031,68028,92026,14023,380

For each additional family member add $3,890.

For each additional college student subtract $2,760.

The income protection allowances (IPA) for independent students with dependents other than a spouse for award year 2010-11 are:

Independent Students With Dependents Other Than a Spouse

[Number in college]

Family size12345
2$19,690$16,330
324,51021,160$17,800
430,28026,91023,560$20,190
535,73032,35029,00025,640$22,290
641,78038,41035,08031,69028,350

For each additional family member add $4,710.

For each additional college student subtract $3,350.

The income protection allowances for single independent students and independent students without dependents other than a spouse for award year 2010-11 are:

Marital statusNumber in collegeIPA
Single1$7,780
Married27,780
Married112,460

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 $345,000$46,000 + 50% of NW over $115,000.
$345,001 to $580,000$161,000 + 60% of NW over $345,000.
$580,001 or more$302,000 + 100% of NW over $580,000.

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
262,8001,100
275,5002,200
288,3003,300
2911,1004,400
3013,8005,500
3116,6006,600
3219,4007,700
3322,1008,700
3424,9009,800
3527,70010,900
3630,40012,000
3733,20013,100
3836,00014,200
3938,70015,300
4041,50016,400
4142,20016,700
4243,30017,100
4344,40017,500
4445,50017,900
4546,60018,300
4647,70018,700
4748,90019,100
4850,10019,600
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4951,30020,100
5052,90020,500
5154,20021,000
5255,50021,500
5357,10022,000
5458,50022,600
5560,20023,200
5662,00023,700
5763,50024,300
5865,30025,000
5967,20025,600
6069,20026,300
6171,20027,000
6273,20027,800
6375,60028,500
6477,70029,300
65 or older80,30030,100

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
262,8001,100
275,5002,200
288,3003,300
2911,1004,400
3013,8005,500
3116,6006,600
3219,4007,700
3322,1008,700
3424,9009,800
3527,70010,900
3630,40012,000
3733,20013,100
3836,00014,200
3938,70015,300
4041,50016,400
4142,20016,700
4243,30017,100
4344,40017,500
4445,50017,900
4546,60018,300
4647,70018,700
4748,90019,100
4850,10019,600
4951,30020,100
5052,90020,500
5154,20021,000
5255,50021,500
5357,10022,000
5458,50022,600
5560,20023,200
5662,00023,700
5763,50024,300
5865,30025,000
5967,20025,600
6069,20026,300
6171,20027,000
6273,20027,800
6375,60028,500
6477,70029,300
65 or older80,30030,100

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
262,8001,100
275,5002,200
288,3003,300
2911,1004,400
3013,8005,500
3116,6006,600
3219,4007,700
3322,1008,700
3424,9009,800
3527,70010,900
3630,40012,000
3733,20013,100
3836,00014,200
3938,70015,300
4041,50016,400
4142,20016,700
4243,30017,100
4344,40017,500
4445,50017,900
4546,60018,300
4647,70018,700
4748,90019,100
4850,10019,600
4951,30020,100
5052,90020,500
5154,20021,000
5255,50021,500
5357,10022,000
5458,50022,600
5560,20023,200
5662,00023,700
5763,50024,300
5865,30025,000
5967,20025,600
6069,20026,300
6171,20027,000
6273,20027,800
6375,60028,500
6477,70029,300
65 or older80,30030,100

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 $14,50022% of AAI.
$14,501 to $18,200$3,190 + 25% of AAI over $14,500.
$18,201 to $21,900$4,115 + 29% of AAI over $18,200.
$21,901 to $25,600$5,188 + 34% of AAI over $21,900.
$25,601 to $29,300$6,446 + 40% of AAI over $25,600.
$29,301 or more$7,926 + 47% of AAI over $29,300.

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−$750.
Start Printed Page 26382
($3,409) to $14,50022% of AAI.
$14,501 to $18,200$3,190 + 25% of AAI over $14,500.
$18,201 to $21,900$4,115 + 29% of AAI over $18,200.
$21,901 to $25,600$5,188 + 34% of AAI over $21,900.
$25,601 to $29,300$6,446 + 40% of AAI over $25,600.
$29,301 or more$7,926 + 47% of AAI over $29,300.

5. Employment Expense Allowance. This allowance for employment-related expenses, which is used for the parents of dependent students and for married independent students, 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 & upAll
Alabama3%2%2%
Alaska2%1%0%
Arizona4%3%3%
Arkansas4%3%3%
California9%8%5%
Colorado5%4%3%
Connecticut8%7%4%
Delaware5%4%3%
District of Columbia7%6%6%
Florida4%3%1%
Georgia5%4%4%
Hawaii5%4%4%
Idaho5%4%4%
Illinois6%5%2%
Indiana4%3%3%
Iowa5%4%3%
Kansas5%4%3%
Kentucky5%4%4%
Louisiana3%2%2%
Maine6%5%4%
Maryland8%7%5%
Massachusetts7%6%4%
Michigan5%4%3%
Minnesota6%5%4%
Mississippi3%2%2%
Missouri5%4%3%
Montana5%4%3%
Nebraska5%4%3%
Nevada3%2%1%
New Hampshire5%4%1%
New Jersey9%8%4%
New Mexico3%2%2%
New York10%9%6%
North Carolina6%5%4%
North Dakota3%2%1%
Ohio6%5%4%
Oklahoma4%3%3%
Oregon7%6%5%
Pennsylvania5%4%3%
Rhode Island7%6%4%
South Carolina5%4%3%
South Dakota2%1%1%
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Tennessee2%1%1%
Texas3%2%1%
Utah5%4%4%
Vermont6%5%3%
Virginia7%6%4%
Washington3%2%1%
West Virginia3%2%2%
Wisconsin7%6%4%
Wyoming2%1%1%
Other3%2%2%

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

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

End Authority Start Signature

Dated: May 27, 2009.

James F. Manning,

Acting Chief Operating Officer Federal Student Aid.

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[FR Doc. E9-12668 Filed 6-1-09; 8:45 am]

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