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The Secretary of Education announces the annual update to the tables used in the need analysis methodology that an institution of higher education must use in calculating expected family contributions for the 1996-97 award year under the Federal Pell Gra

FR part
III
Attachments:
PublicationDate: 5/31/95
FRPart: III
RegPartsAffected:
PageNumbers: 28453-28459
Summary: The Secretary of Education announces the annual update to the tables used in the need analysis methodology that an institution of higher education must use in calculating expected family contributions for the 1996-97 award year under the Federal Pell Grant, campus-based (Federal Perkins Loan, Federal Work-Study, and Federal Supplemental Educational Opportunity Grant), Federal Family Education Loan and William D. Ford Federal Direct Loan programs. The Secretary takes this action under the authority of Title IV of the Higher Education Act of 1965, as amended (HEA).
CommentDueDate:

  
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[


[Federal Register: May 31, 1995 (Volume 60, Number 104)]
[Notices ]
[Page 28453-28459]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31my95-109]



[[Page 28453]]

_______________________________________________________________________

Part III





Department of Education





_______________________________________________________________________



Federal Pell Grant Program; Need Analysis Methodology for 1996-97 Award
Year, Revision; Notice

[[Page 28454]]

DEPARTMENT OF EDUCATION


Federal Pell Grant, Federal Perkins Loan, Federal Work-Study,
Federal Supplemental Educational Opportunity Grant, Federal Family
Education Loan, and William D. Ford Federal Direct Loan Programs;
Revision of the Need Analysis Methodology for the 1996-97 Award Year

AGENCY: Department of Education.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Secretary of Education announces the annual update to the
tables used in the need analysis methodology that an institution of
higher education must use in calculating expected family contributions
for the 1996-97 award year under the Federal Pell Grant, campus-based
(Federal Perkins Loan, Federal Work-Study, and Federal Supplemental
Educational Opportunity Grant), Federal Family Education Loan and
William D. Ford Federal Direct Loan programs. The Secretary takes this
action under the authority of Title IV of the Higher Education Act of
1965, as amended (HEA).

FOR FURTHER INFORMATION CONTACT: Ms. Edith Bell, Program Specialist,
General Provisions Branch, Policy Development Division, U.S. Department
of Education, 600 Independence Avenue, S.W. (Room 3053, ROB-3),
Washington, DC. 20202-5444, telephone (202) 708-7888. Deaf and hearing
impaired individuals may call the Federal Information Relay Service at
1-800-877-8339 between 8 a.m. and 8 p.m., Eastern time, Monday through
Friday.

SUPPLEMENTARY INFORMATION: The need analysis methodology is used to
determine student eligibility for assistance under Title IV of the HEA.
This methodology, referred to as the Federal Needs Analysis
Methodology, is used to calculate the expected family contribution
(EFC) for the Federal Pell Grant, the campus-based (Federal Perkins
Loan, Federal Work-Study, and Federal Supplemental Educational
Opportunity Grant), Federal Family Education Loan, and William D. Ford
Federal Direct Loan programs. This methodology is established by
statute.

Federal Needs Analysis Methodology

Part F of Title IV of the HEA specifies the criteria, data
elements, calculations, and tables for the computation of expected
family contributions for the Federal Pell Grant, campus-based, Federal
Family Education Loan, and William D. Ford Federal Direct Loan
programs. In addition, section 478 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 for the 12 months between December 31 of
the previous year and December 31 of the current year. The changes are
based, in general, upon increases in the Consumer Price Index.
For the award year 1996-97, the Secretary is charged with updating
the income protection allowances, adjusted net worth of a business or
farm, and the assessment schedules and rates to account for inflation
that took place between December 1994 and December 1995. However, since
the Secretary must publish these tables before December 1995, 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 1994. The Secretary estimates that the increase in the
Consumer Price Index for all Urban Consumers for the period December
1994 through December 1995 will be 3.0 percent. The updated tables for
the 1996-97 award year are set forth in sections 1, 2, and 4.
The Secretary must also revise, for each award year, the table on
asset protection allowance as provided for in section 478(d) of the
HEA. The Education Savings and Asset Protection Allowance table for the
award year 1996-97 has been updated below in section 3.3.
Section 477(b)(5) 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.
The HEA provides for the following annual updates:

1. Income Protection Allowance

This allowance is the amount of reasonable living expenses that
would be associated with the maintenance of an individual or family.
The allowance is offset against the family's income and varies by
family size. The income protection allowances for parents of dependent
students and independent students with dependents other than a spouse
for the award year 1996-97 are:

----------------------------------------------------------------------------------------------------------------
Number in College
Family size (including student) ----------------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
2.............................................. $11,480 $9,510 ........... ........... ...........
3.............................................. $14,290 $12,340 $10,380 ........... ...........
4.............................................. $17,650 $15,690 $13,740 $11,770 ...........
5.............................................. $20,830 $18,860 $16,910 $14,950 $12,990
6.............................................. $24,360 $22,400 $20,450 $18,480 $16,530
----------------------------------------------------------------------------------------------------------------
For each additional family member add $2,750.
For each additional college student subtract $1,950.

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 such 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.


[[Page 28455]]
------------------------------------------------------------------------
If the net worth of a
business or farm is-- Then the adjusted net worth is:
------------------------------------------------------------------------
Less than $1............... $0.
1 to $80,000............... 0+40% of NW.
80,001 to $245,000......... 32,000+50% of NW over $80,000.
245,001 to $410,000........ 114,500+60% of NW over $245,000.
410,001 or more............ 213,500+100% of NW over $410,000.
------------------------------------------------------------------------

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
------------------------------------------------------------------------
And there are
-------------------------------
one parent
---------------
Then the
If the age of the older parent is education
two parents savings and
asset
protection
allowance is--
------------------------------------------------------------------------
25 or less.............................. 0 0
26...................................... 2,300 1,600
27...................................... 4,600 3,300
28...................................... 7,000 4,900
29...................................... 9,300 6,500
30...................................... 11,600 8,200
31...................................... 13,900 9,800
32...................................... 16,200 11,400
33...................................... 18,600 13,100
34...................................... 20,900 14,700
35...................................... 23,200 16,300
36...................................... 25,500 18,000
37...................................... 27,800 19,600
38...................................... 30,200 21,200
39...................................... 32,500 22,900
40...................................... 34,800 24,500
41...................................... 35,500 25,000
42...................................... 36,400 25,600
43...................................... 37,300 26,100
44...................................... 38,300 26,700
45...................................... 39,200 27,200
46...................................... 40,300 27,900
47...................................... 41,300 28,600
48...................................... 42,300 29,300
49...................................... 43,700 29,800
50...................................... 44,800 30,500
51...................................... 45,900 31,300
52...................................... 47,400 32,000
53...................................... 48,500 33,000
54...................................... 50,100 33,700
55...................................... 51,600 34,500
56...................................... 53,200 35,500
57...................................... 54,800 36,400
58...................................... 56,500 37,400
59...................................... 58,200 38,300
60...................................... 60,000 39,400
61...................................... 62,100 40,500
62...................................... 64,300 41,700
63...................................... 66,200 42,900
64...................................... 68,400 44,100
65 and older............................ 70,800 45,500
------------------------------------------------------------------------



[[Page 28456]]
Independent Students Without Dependents Other Than a Spouse
------------------------------------------------------------------------
And the student is
-------------------------------
Single
---------------
Then the
If the age of the student is education
Married savings and
asset
protection
allowance is--
------------------------------------------------------------------------
25 or less.............................. 0 0
26...................................... 2,300 1,600
27...................................... 4,600 3,300
28...................................... 7,000 4,900
29...................................... 9,300 6,500
30...................................... 11,600 8,200
31...................................... 13,900 9,800
32...................................... 16,200 11,400
33...................................... 18,600 13,100
34...................................... 20,900 14,700
35...................................... 23,200 16,300
36...................................... 25,500 18,000
37...................................... 27,800 19,600
38...................................... 30,200 21,200
39...................................... 32,500 22,900
40...................................... 34,800 24,500
41...................................... 35,500 25,000
42...................................... 36,400 25,600
43...................................... 37,300 26,100
44...................................... 38,300 26,700
45...................................... 39,200 27,200
46...................................... 40,300 27,900
47...................................... 41,300 28,600
48...................................... 42,300 29,300
49...................................... 43,700 29,800
50...................................... 44,800 30,500
51...................................... 45,900 31,300
52...................................... 47,400 32,000
53...................................... 48,500 33,000
54...................................... 50,100 33,700
55...................................... 51,600 34,500
56...................................... 53,200 35,500
57...................................... 54,800 36,400
58...................................... 56,500 37,400
59...................................... 58,200 38,300
60...................................... 60,000 39,400
61...................................... 62,100 40,500
62...................................... 64,300 41,700
63...................................... 66,200 42,900
64...................................... 68,400 44,100
65 and older............................ 70,800 45,500
------------------------------------------------------------------------


Independent Students With Dependents Other Than a Spouse
------------------------------------------------------------------------
And the student is
-------------------------------
Single
---------------
Then the
If the age of the student is education
Married savings and
asset
protection
allowance is--
------------------------------------------------------------------------
25 or less.............................. 0 0
26...................................... 2,300 1,600
27...................................... 4,600 3,300
28...................................... 7,000 4,900
29...................................... 9,300 6,500
30...................................... 11,600 8,200
31...................................... 13,900 9,800
32...................................... 16,200 11,400
33...................................... 18,600 13,100
34...................................... 20,900 14,700
35...................................... 23,200 16,300
[[Page 28457]]

36...................................... 25,500 18,000
37...................................... 27,800 19,600
38...................................... 30,200 21,200
39...................................... 32,500 22,900
40...................................... 34,800 24,500
41...................................... 35,500 25,000
42...................................... 36,400 25,600
43...................................... 37,300 26,100
44...................................... 38,300 26,700
45...................................... 39,200 27,200
46...................................... 40,300 27,900
47...................................... 41,300 28,600
48...................................... 42,300 29,300
49...................................... 43,700 29,800
50...................................... 44,800 30,500
51...................................... 45,900 31,300
52...................................... 47,400 32,000
53...................................... 48,500 33,000
54...................................... 50,100 33,700
55...................................... 51,600 34,500
56...................................... 53,200 35,500
57...................................... 54,800 36,400
58...................................... 56,500 37,400
59...................................... 58,200 38,300
60...................................... 60,000 39,400
61...................................... 62,100 40,500
62...................................... 64,300 41,700
63...................................... 66,200 42,900
64...................................... 68,400 44,100
65 and older............................ 70,800 45,500
------------------------------------------------------------------------

4. Assessment Schedules and Rates

Two separate assessment schedules--one for dependent students, and
one for independent students with dependents other than a spouse--are
used in determining the expected family 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 financial strength which considers
both income and assets.

Independent Students
------------------------------------------------------------------------
If AAI is-- Then the contribution is--
------------------------------------------------------------------------
Less than -$3,409.................... -$750.
$3,409 to $10,300.................... 22% of AAI.
$10,301 to $12,900................... $2,266 +25% of AAI over $10,300.
$12,901 to $15,500................... $2,916 +29% of AAI over $12,900.
$15,501 to $18,100................... $3,670 +34% of AAI over $15,500.
$18,101 to $20,700................... $4,554 +40% of AAI over $18,100.
$20,701 or more...................... $5,594 +47% of AAI over $20,700.
------------------------------------------------------------------------


Independent Students With Dependents Other Than a Spouse
------------------------------------------------------------------------
If AAI is-- Then the contribution is--
------------------------------------------------------------------------
Less than -$3,409.................... -$750.
$3,409 to $10,300.................... 22% of AAI.
$10,301 to $12,900................... $2,266 +25% of AAI over $10,300.
$12,901 to $15,500................... $2,916 +29% of AAI over $12,900.
$15,501 to $18,100................... $3,670 +34% of AAI over $15,500.
$18,101 to $20,700................... $4,554 +40% of AAI over $18,100.
$20,701 or more...................... $5,594 +47% of AAI over $20,700.
------------------------------------------------------------------------

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-earner family compared to a
one-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 [[Page 28458]] dependents other
than a spouse, and independent students with dependents other than a
spouse is the lesser of $2,600 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 education expenses. There are four tables for state and
other taxes, one each for parents of dependent students, dependent
students, independent students without dependents other than a spouse,
and independent students with dependents other than a spouse.

Parents of Dependent Students
------------------------------------------------------------------------
And parents' total
income is--
-------------------------
$15,000 of
If parents' State or territory of residence is more
less than ------------
$15,000 or 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
------------------------------------------------------------------------
And student's total
income is--
-------------------------
$15,000 or
If student's State or territory of residence more
is less than ------------
$15,000 or 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
------------------------------------------------------------------------
The
If student's State or territory of residence is 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
------------------------------------------------------------------------



[[Page 28459]]
Independent Students Without Dependents Other Than a Spouse
------------------------------------------------------------------------
The
If student's State or territory of residence is 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
------------------------------------------------------------------------

(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 24, 1995.
David A. Longanecker
Assistant Secretary for Postsecondary Education
[FR Doc. 95-13199 Filed 5-30-95; 8:45 am]
BILLING CODE 4000-01-P



]

Last Modified: 06/28/1998