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Publication Date: May 24, 2011

Posted Date: May 24, 2011

Subject: Notice of revision of the Federal Need Analysis Methodology for the 2012-2013 award year.

FR Type: Notice

[Federal Register Volume 76, Number 100 (Tuesday, May 24, 2011)]
[Notices]
[Pages 30139-30142]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-12812]

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DEPARTMENT OF EDUCATION

Federal Need Analysis Methodology for the 2012-2013 Award Year

AGENCY: Federal Student Aid, Department of Education.

ACTION: Notice of revision of the Federal Need Analysis Methodology for 
the 2012-2013 award year.

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    Overview Information:

[CFDA Numbers 84.063; 84.038; 84.033; 84.007; 84.268; 84.379].

Federal Need Analysis Methodology for the 2012-2013 award year; Federal 
Pell Grant, Federal Perkins Loan, Federal Work-Study, Federal 
Supplemental Educational Opportunity Grant, William D. Ford Federal 
Direct Loan, and TEACH Grant Programs.

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 
2012-2013 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 that 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, Federal Perkins Loan, Federal 
Work-Study, Federal Supplemental Educational Opportunity Grant, William 
D. Ford Federal Direct Loan, and the Teach Grant Programs (Title IV, 
HEA Programs).

FOR FURTHER INFORMATION CONTACT: Ms. Marya Dennis, Management and 
Program Analyst, U.S. Department of Education, room 63G2, Union Center 
Plaza, 830 First Street, NE., Washington, DC 20202-5454. 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 computer 
diskette) on request to the contact person listed under FOR FURTHER 
INFORMATION CONTACT.

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 2012-2013, 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 
2010 and December 2011. However, because the Secretary must publish 
these tables before December 2011, 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 (CPI-U) for 2011. The 
Secretary must also account for any misestimation of inflation for the 
prior year. In developing the table values for the 2011-2012 award 
year, the Secretary assumed a 1.2 percent increase in the CPI-U for the 
period December 2009 through December 2010. Actual inflation for this 
time period was 1.4 percent. The Secretary estimates that the increase 
in the CPI-U for the period December 2010 through December 2011 will be 
0.8 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 now 
includes new 2012-2013 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 2012-2013 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 2012-2013 has been 
updated in section 5 of this notice.
    The HEA provides for the following annual updates:
    1. Income Protection Allowance (IPA). 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 IPA for the dependent student is $6,000. The IPAs for 
parents of dependent students for award year 2012-2013 are:
    The IPAs for independent students with dependents other than a 
spouse for award year 2012-13 are:

[[Page 30140]]


*NOTE: CHART'S OMITTED -- SEE PDF

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(Catalog of Federal Domestic Assistance Numbers: 84.063 Federal Pell 
Grant Program; 84.038 Federal Perkins Loan Program; 84.033 Federal 
Work-Study Programs; 84.007 Federal Supplemental Educational 
Opportunity Grant Program; 84.268 William D. Ford Federal Direct 
Loan Program; 84.379 TEACH Grant Program)

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

    Dated: May 19, 2011.
James Runcie,
Deputy Chief Operating Officer, Federal Student Aid.
[FR Doc. 2011-12812 Filed 5-23-11; 8:45 am]
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