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:
Number in College—
1
2
3
4
5
Family size:
2
13,470
11,160
3
16,770
14,480
12,170
4
20,710
18,410
16,120
13,810
5
24,440
22,130
19,840
17,540
15,240
6
28,580
26,280
23,900
21,680
19,390
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 status
Number in college
Amount
Single
1
$5,400
Married
2
5,400
Married
1
8,640
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 parents
one parent
then the education savings and asset protection allowance is—
25 or less
0
0
26
2,500
1,200
27
5,000
2,500
28
7,500
3,700
29
9,900
5,000
30
12,400
6,200
31
14,900
7,400
32
17,400
8,700
33
19,900
9,900
34
22,400
11,200
35
24,900
12,400
36
27,400
13,600
37
29,800
14,900
38
32,300
16,100
39
34,800
17,400
40
37,300
18,600
41
38,200
19,000
42
39,200
19,400
43
40,200
19,800
44
41,200
20,300
45
42,200
20,700
46
43,300
21,100
47
44,300
21,600
48
45,400
22,200
49
46,600
22,600
50
47,700
23,100
51
49,200
23,700
52
50,400
24,200
53
51,700
24,800
54
53,200
25,400
55
54,500
26,200
56
56,200
26,800
57
57,900
27,400
58
59,600
28,200
59
61,400
28,900
60
63,200
29,700
61
65,100
30,500
62
67,300
31,200
63
69,200
32,100
64
71,600
33,100
65 and over
74,000
34,100
Independent Students Without Dependents Other Than a Spouse
If the age of the student is—
And the student is
married
single
then the education savings and asset protection allowance is—
25 or less
0
0
26
2,500
1,200
27
5,000
2,500
28
7,500
3,700
29
9,900
5,000
30
12,400
6,200
31
14,900
7,400
32
17,400
8,700
33
19,900
9,900
34
22,400
11,200
35
24,900
12,400
36
27,400
13,600
37
29,800
14,900
38
32,300
16,100
39
34,800
17,400
40
37,300
18,600
41
38,200
19,000
42
39,200
19,400
43
40,200
19,800
44
41,200
20,300
45
42,200
20,700
46
43,300
21,100
47
44,300
21,600
48
45,400
22,200
49
46,600
22,600
50
47,700
23,100
51
49,200
23,700
52
50,400
24,200
53
51,700
24,800
54
53,200
25,400
55
54,500
26,200
56
56,200
26,800
57
57,900
27,400
58
59,600
28,200
59
61,400
28,900
60
63,200
29,700
61
65,100
30,500
62
67,300
31,200
63
69,200
32,100
64
71,600
33,100
65 and over
74,000
34,100
Independent Students With Dependents Other Than a Spouse
If the Age of the student is—
And the student is
married
single
then the education savings and asset protection allowance is—
25 or less
0
0
26
2,500
1,200
27
5,000
2,500
28
7,500
3,700
29
9,900
5,000
30
12,400
6,200
31
14,900
7,400
32
17,400
8,700
33
19,900
9,900
34
22,400
11,200
35
24,900
12,400
36
27,400
13,600
37
29,800
14,900
38
32,300
16,100
39
34,800
17,400
40
37,300
18,600
41
38,200
19,000
42
39,200
19,400
43
40,200
19,800
44
41,200
20,300
45
42,200
20,700
46
43,300
21,100
47
44,300
21,600
48
45,400
22,200
49
46,600
22,600
50
47,400
23,100
51
49,200
23,700
52
50,400
24,200
53
51,700
24,800
54
53,200
25,400
55
54,500
26,200
56
56,200
26,800
57
57,900
27,400
58
59,600
28,200
59
61,400
28,900
60
63,200
29,700
61
65,100
30,500
62
67,300
31,200
63
69,200
32,100
64
71,600
33,100
65 and over
74,000
34,100
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 $12,000
22% 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 $12,000
22% 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
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, Texas
3
2
Louisiana, Florida, Washington, South Dakota
4
3
Alabama, Mississippi
5
4
North Dakota, Illinois, Connecticut, New Mexico, Missouri, West Virginia, Arizona, Indiana, Oklahoma, Arkansas
6
5
New Hampshire, Pennsylvania, Colorado, Georgia, Kansas, Kentucky, Idaho
7
6
North Carolina, Virginia, Delaware, South Carolina, Ohio, Utah, Nebraska, Montana, California, New Jersey, Iowa, Vermont, Hawaii
8
7
Massachusetts, Rhode Island, Michigan, Minnesota, Maine, Maryland
9
8
District of Columbia, Wisconsin, Oregon
10
9
New York
11
10
Other
4
3
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, Texas
3
2
Louisiana, Florida, Washington, South Dakota
4
3
Alabama, Mississippi
5
4
North Dakota, Illinois, Connecticut, New Mexico, Missouri, West Virginia, Arizona, Indiana, Oklahoma, Arkansas
6
5
New Hampshire, Pennsylvania, Colorado, Georgia, Kansas, Kentucky, Idaho
7
6
North Carolina, Virginia, Delaware, South Carolina, Ohio, Utah, Nebraska, Montana, California, New Jersey, Iowa, Vermont, Hawaii
8
7
Massachusetts, Rhode Island, Michigan, Minnesota, Maine, Maryland
9
8
District of Columbia, Wisconsin, Oregon
10
9
New York
11
10
Other
4
3
Dependent Students
If student's State or territory of residence is—
The percentage is—
Alaska, Texas, South Dakota, Wyoming, Washington, Tennessee, Nevada
0
Florida, New Hampshire
1
Connecticut, Louisiana, Illinois, North Dakota
2
Mississippi, Arizona, Alabama, Pennsylvania, New Jersey, Missouri
3
Nebraska, Indiana, Colorado, New Mexico, Oklahoma, Kansas, West Virginia, Rhode Island, Virginia, Georgia, Arkansas, Vermont, Michigan
4
Montana, Idaho, Utah, Kentucky, Massachusetts, California, North Carolina, South Carolina, Ohio, Iowa, Delaware, Maine, Wisconsin
5
Oregon, Maryland, Minnesota, Hawaii
6
District of Columbia, New York
7
Other
2
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, Nevada
0
Florida, New Hampshire
1
Connecticut, Louisiana, Illinois, North Dakota
2
Mississippi, Arizona, Alabama, Pennsylvania, New Jersey, Missouri
3
Nebraska, Indiana, Colorado, New Mexico, Oklahoma, Kansas, West Virginia, Rhode Island, Virginia, Georgia, Arkansas, Vermont, Michigan
4
Montana, Idaho, Utah, Kentucky, Massachusetts, California, North Carolina, South Carolina, Ohio, Iowa, Delaware, Maine, Wisconsin
5
Oregon, Maryland, Minnesota, Hawaii
6
District of Columbia, New York
7
Other
2
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 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 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)
Dated: May 28, 2002.
Candy Kane,
Acting Chief Operating Officer, Federal Student Aid.