FR Doc E7-10621
[Federal Register: June 1, 2007 (Volume 72, Number 105)]
[Notices]
[Page 30568-30572]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01jn07-61]
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DEPARTMENT OF EDUCATION
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
AGENCY: Federal Student Aid, U.S. Department of Education.
ACTION: Notice of revision of the Federal Need Analysis Methodology for
the 2008-2009 award year.
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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
2008-2009 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).
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), you may call
the Federal Relay Service (FRS) 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.
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 requires the Secretary to adjust
four of the tables--the Income Protection Allowance, the Adjusted Net
Worth of a Farm or Business, 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 2008-2009 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 2006 and December 2007. However, because
the Secretary must publish these tables before December 2007, 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 2006. The Secretary estimates that the increase in the
Consumer Price Index for All Urban Consumers (CPI-U) for the period
December 2006 through December 2007 will be 2.8 percent. Additionally,
the Higher Education Reconciliation Act of 2005 (HERA, Pub. L. 109-171)
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. HERA
established new 2007-08 award year values for these income protection
allowances, which are being updated for the 2008-09 award year using
the Secretary's estimated inflation rate of 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 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 2008-2009 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 2008-2009 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 $3,080. The income protection allowances for parents of dependent
students for award year 2008-2009 are:
[[Page 30569]]
Parents of Dependent Students
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Number in college
Family size -----------------------------------------------------------
1 2 3 4 5
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2................................................... $15,380 $12,750
3................................................... 19,150 16,540 $13,900
4................................................... 23,660 21,020 18,410 $15,770
5................................................... 27,910 25,280 22,660 20,030 $17,410
6................................................... 32,650 30,010 27,400 24,770 22,150
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For each additional family member add $3,680.
For each additional college student subtract $2,620.
The income protection allowances for independent students with
dependents other than a spouse for award year 2008-2009 are:
Independent Students With Dependents Other Than a Spouse
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Number in college
Family size -----------------------------------------------------------
1 2 3 4 5
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2................................................... $15,750 $13,060 .......... .......... ..........
3................................................... 19,610 16,930 $14,240 .......... ..........
4................................................... 24,220 21,530 18,850 $16,150 ..........
5................................................... 28,580 25,880 23,200 20,510 $17,830
6................................................... 33,420 30,730 28,060 25,350 22,680
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For each additional family member add $3,770.
For each additional college student subtract $2,680.
The income protection allowances for single independent students
and independent students without dependents other than a spouse for
award year 2008-2009 are:
------------------------------------------------------------------------
Number in
Marital status college IPA
------------------------------------------------------------------------
Single.......................................... 1 $6,220
Married......................................... 2 6,220
Married......................................... 1 9,970
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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 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.
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If the net worth of a business or farm Then the adjusted net worth is--
is--
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Less than $1........................... $0.
$1 to $110,000......................... $0 + 40% of NW.
$110,001 to $330,000................... $44,000 + 50% of NW over
$110,000.
$330,001 to $550,000................... $154,000 + 60% of NW over
$330,000.
$550,001 or more....................... $286,000 + 100% of NW over
$550,000.
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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.
[[Page 30570]]
Dependent Students
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And they are
-------------------------
Two parents One parent
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If the age of the student is Then the education
savings and asset
protection allowance is--
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25 or less.................................... 0 0
26............................................ 2,600 1,100
27............................................ 5,100 2,100
28............................................ 7,700 3,200
29............................................ 10,200 4,300
30............................................ 12,800 5,300
31............................................ 15,400 6,400
32............................................ 17,900 7,500
33............................................ 20,500 8,500
34............................................ 23,000 9,600
35............................................ 25,600 10,700
36............................................ 28,200 11,700
37............................................ 30,700 12,800
38............................................ 33,300 13,900
39............................................ 35,800 14,900
40............................................ 38,400 16,000
41............................................ 39,300 16,400
42............................................ 40,300 16,700
43............................................ 41,300 17,100
44............................................ 42,300 17,600
45............................................ 43,400 17,900
46............................................ 44,500 18,300
47............................................ 45,600 18,800
48............................................ 46,700 19,200
49............................................ 47,900 19,700
50............................................ 49,000 20,100
51............................................ 50,500 20,500
52............................................ 51,800 21,000
53............................................ 53,300 21,500
54............................................ 54,600 22,100
55............................................ 56,300 22,600
56............................................ 57,600 23,200
57............................................ 59,300 23,700
58............................................ 61,100 24,400
59............................................ 62,900 25,000
60............................................ 64,700 25,700
61............................................ 66,600 26,300
62............................................ 68,500 27,000
63............................................ 70,800 27,800
64............................................ 72,800 28,500
65 or older................................... 75,200 29,300
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Independent Students Without Dependents Other Than a Spouse
------------------------------------------------------------------------
------------------------------------------------------------------------
And they are
-------------------------
Married Single
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If the age of the student is Then the education
savings and asset
protection allowance is--
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25 or less.................................... 0 0
26............................................ 2,600 1,100
27............................................ 5,100 2,100
28............................................ 7,700 3,200
29............................................ 10,200 4,300
30............................................ 12,800 5,300
31............................................ 15,400 6,400
32............................................ 17,900 7,500
33............................................ 20,500 8,500
34............................................ 23,000 9,600
35............................................ 25,600 10,700
36............................................ 28,200 11,700
37............................................ 30,700 12,800
38............................................ 33,300 13,900
39............................................ 35,800 14,900
40............................................ 38,400 16,000
41............................................ 39,300 16,400
42............................................ 40,300 16,700
43............................................ 41,300 17,100
44............................................ 42,300 17,600
45............................................ 43,400 17,900
46............................................ 44,500 18,300
47............................................ 45,600 18,800
48............................................ 46,700 19,200
49............................................ 47,900 19,700
50............................................ 49,000 20,100
51............................................ 50,500 20,500
52............................................ 51,800 21,000
53............................................ 53,300 21,500
54............................................ 54,600 22,100
55............................................ 56,300 22,600
56............................................ 57,600 23,200
57............................................ 59,300 23,700
58............................................ 61,100 24,400
59............................................ 62,900 25,000
60............................................ 64,700 25,700
61............................................ 66,600 26,300
62............................................ 68,500 27,000
63............................................ 70,800 27,800
64............................................ 72,800 28,500
65 or older................................... 75,200 29,300
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Independent Students With Dependents Other Than a Spouse
------------------------------------------------------------------------
------------------------------------------------------------------------
And they are
-------------------------
Married Single
-------------------------
If the age of the student is Then the education
savings and asset
protection allowance is--
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25 or less.................................... 0 0
26............................................ 2,600 1,100
27............................................ 5,100 2,100
28............................................ 7,700 3,200
29............................................ 10,200 4,300
30............................................ 12,800 5,300
31............................................ 15,400 6,400
32............................................ 17,900 7,500
33............................................ 20,500 8,500
34............................................ 23,000 9,600
35............................................ 25,600 10,700
36............................................ 28,200 11,700
37............................................ 30,700 12,800
38............................................ 33,300 13,900
39............................................ 35,800 14,900
40............................................ 38,400 16,000
41............................................ 39,300 16,400
42............................................ 40,300 16,700
43............................................ 41,300 17,100
44............................................ 42,300 17,600
45............................................ 43,400 17,900
46............................................ 44,500 18,300
47............................................ 45,600 18,800
48............................................ 46,700 19,200
49............................................ 47,900 19,700
50............................................ 49,000 20,100
51............................................ 50,500 20,500
52............................................ 51,800 21,000
53............................................ 53,300 21,500
54............................................ 54,600 22,100
55............................................ 56,300 22,600
56............................................ 57,600 23,200
57............................................ 59,300 23,700
58............................................ 61,100 24,400
59............................................ 62,900 25,000
60............................................ 64,700 25,700
61............................................ 66,600 26,300
62............................................ 68,500 27,000
63............................................ 70,800 27,800
64............................................ 72,800 28,500
65 or older................................... 75,200 29,300
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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--
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Less than -$3,409...................... -$750.
($3,409) to $13,700.................... 22% of AAI.
$13,701 to $17,300..................... $3,014 + 25% of AAI over
$13,700.
$17,301 to $20,800..................... $3,914 + 29% of AAI over
$17,300.
$20,801 to $24,300..................... $4,929 + 34% of AAI over
$20,800.
$24,301 to $27,800..................... $6,119 + 40% of AAI over
$24,300.
[[Page 30571]]
$27,801 or more........................ $7,519 + 47% of AAI over
$27,800.
------------------------------------------------------------------------
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 $13,700.................... 22% of AAI.
$13,701 to $17,300..................... $3,014 + 25% of AAI over
$13,700.
$17,301 to $20,800..................... $3,914 + 29% of AAI over
$17,300.
$20,801 to $24,300..................... $4,929 + 34% of AAI over
$20,800.
$24,301 to $27,800..................... $6,119 + 40% of AAI over
$24,300.
$27,801 or more........................ $7,519 + 47% of AAI over
$27,800.
------------------------------------------------------------------------
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 $3,300 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.
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Parents of dependents and Dependents and
independents with dependents other independents
than a spouse without
State -------------------------------------- dependents other
than a spouse
Under $15,000 $15,000 & up ------------------
(percent) (percent) All (percent)
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Alabama................................................ 3 2 2
Alaska................................................. 2 1 0
Arizona................................................ 4 3 3
Arkansas............................................... 4 3 3
California............................................. 7 6 5
Colorado............................................... 4 3 3
Connecticut............................................ 7 6 4
Delaware............................................... 4 3 3
District of Columbia................................... 7 6 6
Florida................................................ 3 2 1
Georgia................................................ 6 5 3
Hawaii................................................. 4 3 4
Idaho.................................................. 5 4 3
Illinois............................................... 5 4 2
Indiana................................................ 4 3 3
Iowa................................................... 5 4 3
Kansas................................................. 5 4 3
Kentucky............................................... 5 4 4
Louisiana.............................................. 3 2 2
Maine.................................................. 6 5 4
Maryland............................................... 7 6 5
Massachusetts.......................................... 6 5 4
Michigan............................................... 5 4 3
Minnesota.............................................. 6 5 4
Mississippi............................................ 4 3 2
Missouri............................................... 5 4 3
Montana................................................ 5 4 3
Nebraska............................................... 5 4 3
Nevada................................................. 3 2 1
New Hampshire.......................................... 5 4 1
New Jersey............................................. 8 7 4
New Mexico............................................. 4 3 3
[[Page 30572]]
New York............................................... 9 8 6
North Carolina......................................... 6 5 4
North Dakota........................................... 2 1 1
Ohio................................................... 6 5 4
Oklahoma............................................... 6 5 3
Oregon................................................. 7 6 5
Pennsylvania........................................... 5 4 3
Rhode Island........................................... 7 6 4
South Carolina......................................... 5 4 3
South Dakota........................................... 2 1 1
Tennessee.............................................. 2 1 1
Texas.................................................. 3 2 1
Utah................................................... 5 4 4
Vermont................................................ 5 4 3
Virginia............................................... 5 4 3
Washington............................................. 4 3 2
West Virginia.......................................... 3 2 2
Wisconsin.............................................. 7 6 4
Wyoming................................................ 2 1 1
Other.................................................. 3 2 2
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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;
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)
Dated: May 29, 2007.
Theresa S. Shaw,
Chief Operating Officer, Federal Student Aid.
[FR Doc. E7-10621 Filed 5-31-07; 8:45 am]
BILLING CODE 4000-01-P