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Federal Needs Analysis Methodology

Attachments:
PublicationDate: 5/30/2000
FRPart:
RegPartsAffected:
PageNumbers: 34454-34458
Summary: Federal Needs Analysis Methodology
CommentDueDate:

  
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[

[Federal Register: May 30, 2000 (Volume 65, Number 104)]
[Notices]
[Page 34454-34458]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30my00-41]

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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

AGENCY: Office of Student Financial Assistance, Department of
Education.

ACTION: Notice of revision of the Federal need analysis methodology for
the 2001-2002 award year.

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

SUMMARY: The Secretary of Education 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 2001-2002 under part F of title IV of the Higher
Education Act (HEA) of 1965, as amended (Title IV, HEA Programs). 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, HEA Programs include the Federal Pell Grant, campus-based (Federal
Perkins Loan, Federal Work-Study, and Federal Supplemental Educational
Opportunity Grant Programs), Federal Family Education Loan, and William
D. Ford Federal Direct Loan Programs.

FOR FURTHER INFORMATION CONTACT: Ms. Edith Bell, Program Specialist,
U.S. Department of Education, 400 Maryland Avenue, SW., (Room 4621,
ROB-3), Washington, DC 20202-5444.

[[Page 34455]]

Telephone: (202) 708-5591. If you use a telecommunications device for
the deaf (TDD), you may call the Federal Information Relay Service
(FIRS) at 1-800-877-8339.
Individuals with disabilities may obtain this document in an
alternate 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 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 2001-2002 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 1999 and December 2000. However, since
the Secretary must publish these tables before December 2000, 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 1999. The Secretary estimates that the increase in the
Consumer Price Index for all Urban Consumers for the period December
1999 through December 2000 will be 2.3 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 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 2001-2002 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
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
allowance for the dependent student is $2,250. The income protection
allowances for parents of dependent students and independent students
with dependents other than a spouse for award year 2001-2002 are:

----------------------------------------------------------------------------------------------------------------
Number in college
Family size ----------------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
2.............................................. 12,760 10,580
3.............................................. 15,890 13,720 11,540
4.............................................. 19,630 17,440 15,270 13,090
5.............................................. 23,160 20,970 18,800 16,620 14,450
6.............................................. 27,090 24,900 22,730 20,550 18,380
----------------------------------------------------------------------------------------------------------------
For each additional family member add $3,060.
For each additional college student subtract $2,170.

The income protection allowances for independent students without
dependents other than a spouse for award year 2001-2002 are:

------------------------------------------------------------------------
Number in
Marital status college
------------------------------------------------------------------------
Single........................................ 1 $5,110
Married....................................... 2 5,110
Married....................................... 1 8,180
------------------------------------------------------------------------

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-- The adjusted net worth is--
------------------------------------------------------------------
Less than $1............................. 0
$1 to $90,000............................ 0 + 40% of NW..........................
$90,001 to $275,000...................... 36,000 + 50% of NW over..................... $90,000
$275,001 to $455,000..................... 128,500 + 60% of NW over..................... 275,000
$455,001 or more......................... 236,500 + 100% of NW over..................... 455,000
----------------------------------------------------------------------------------------------------------------


[[Page 34456]]

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--
---------------------
If the age of the older parent is-- Two One
parents parent
------------------------------------------------------------------------
Then the education
savings and asset
protection allowance
is--
---------------------
25 or less........................................ 0 0
26................................................ 2,500 1,500
27................................................ 5,000 2,900
28................................................ 7,500 4,400
29................................................ 10,000 5,800
30................................................ 12,500 7,300
31................................................ 15,000 8,800
32................................................ 17,500 10,200
33................................................ 19,900 11,700
34................................................ 22,400 13,100
35................................................ 24,900 14,600
36................................................ 27,400 16,100
37................................................ 29,900 17,500
38................................................ 32,400 19,000
39................................................ 34,900 20,400
40................................................ 37,400 21,900
41................................................ 38,400 22,300
42................................................ 39,300 22,800
43................................................ 40,300 23,300
44................................................ 41,400 23,800
45................................................ 42,400 24,400
46................................................ 43,500 24,900
47................................................ 44,600 25,500
48................................................ 45,700 26,100
49................................................ 46,800 26,700
50................................................ 48,300 27,200
51................................................ 49,500 27,900
52................................................ 50,800 28,600
53................................................ 52,300 29,400
54................................................ 53,600 30,100
55................................................ 55,300 30,800
56................................................ 56,900 31,500
57................................................ 58,700 32,400
58................................................ 60,400 33,200
59................................................ 62,200 34,200
60................................................ 64,100 35,000
61................................................ 66,000 36,000
62................................................ 68,300 37,000
63................................................ 70,600 38,000
64................................................ 72,700 39,100
65 and over....................................... 75,100 40,400
------------------------------------------------------------------------


Independent Students Without Dependents Other Than a Spouse
------------------------------------------------------------------------
And the student is--
If the age of the student is-- ---------------------
Married Single
------------------------------------------------------------------------
Then the education
savings and asset
protection allowance
is--
---------------------
25 or less........................................ 0 0
26................................................ 2,500 1,500
27................................................ 5,000 2,900
28................................................ 7,500 4,400
29................................................ 10,000 5,800
30................................................ 12,500 7,300
31................................................ 15,000 8,800
32................................................ 17,500 10,200
33................................................ 19,900 11,700
34................................................ 22,400 13,100
35................................................ 24,900 14,600
36................................................ 27,400 16,100
37................................................ 29,900 17,500
38................................................ 32,400 19,000
39................................................ 34,900 20,400
40................................................ 37,400 21,900
41................................................ 38,400 22,300
42................................................ 39,300 22,800
43................................................ 40,300 23,300
44................................................ 41,400 23,800
45................................................ 42,400 24,400
46................................................ 43,500 24,900
47................................................ 44,600 25,500
48................................................ 45,700 26,100
49................................................ 46,800 26,700
50................................................ 48,300 27,200
51................................................ 49,500 27,900
52................................................ 50,800 28,600
53................................................ 52,300 29,400
54................................................ 53,600 30,100
55................................................ 55,300 30,800
56................................................ 56,900 31,500
57................................................ 58,700 32,400
58................................................ 60,400 33,200
59................................................ 62,200 34,200
60................................................ 64,100 35,000
61................................................ 66,000 36,000
62................................................ 68,300 37,000
63................................................ 70,600 38,000
64................................................ 72,700 39,100
65 and over....................................... 75,100 40,400
------------------------------------------------------------------------


Independent Students With Dependents Other Than a Spouse
------------------------------------------------------------------------
And the student is--
If the age of the student is-- ---------------------
Married Single
------------------------------------------------------------------------
Then the education
savings and assets
protection allowance
is--
---------------------
25 or less........................................ 0 0
26................................................ 2,500 1,500
27................................................ 5,000 2,900
28................................................ 7,500 4,400
29................................................ 10,000 5,800
30................................................ 12,500 7,300
31................................................ 15,000 8,800
32................................................ 17,500 10,200
33................................................ 19,900 11,700
34................................................ 22,400 13,100
35................................................ 24,900 14,600
36................................................ 27,400 16,100
37................................................ 29,900 17,500
38................................................ 32,400 19,000
39................................................ 34,900 20,400
40................................................ 37,400 21,900
41................................................ 38,400 22,300
42................................................ 39,300 22,800
43................................................ 40,300 23,300
44................................................ 41,400 23,800
45................................................ 42,400 24,400
46................................................ 43,500 24,900
47................................................ 44,600 25,500
48................................................ 45,700 26,100
49................................................ 46,800 26,700
50................................................ 48,300 27,200
51................................................ 49,500 27,900
52................................................ 50,800 28,600
53................................................ 52,300 29,400
54................................................ 53,600 30,100
55................................................ 55,300 30,800
56................................................ 56,900 31,500
57................................................ 58,700 32,400
58................................................ 60,400 33,200
59................................................ 62,200 34,200
60................................................ 64,100 35,000
61................................................ 66,000 36,000
62................................................ 68,300 37,000
63................................................ 70,600 38,000
64................................................ 72,700, 39,100
65 and over....................................... 75,100 40,400
------------------------------------------------------------------------

4. Assessment Schedules and Rates. Two schedules, 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 $11,400...................... + 22% of AAI.........................

[[Page 34457]]


$11,401 to $14,300....................... 2,508 + 25% of AAI over.................... $11,400
$14,301 to $17,200....................... 3,233 + 29% of AAI over.................... 14,300
$17,201 to $20,100....................... 4,074 + 34% of AAI over.................... 17,200
$20,101 to $23,000....................... 5,060 + 40% of AAI over.................... 20,100
$23,001 or more.......................... 6,220 + 47% of AAI over.................... 23,000
----------------------------------------------------------------------------------------------------------------

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 $11,400.................... ...... 22% of AAI.......................
$11,401 to $14,300..................... 2,508 + 25% of AAI over.................. $11,400
$14,301 to $17,200..................... 3,233 + 29% of AAI over.................. 14,300
$17,201 to $20,100..................... 4,074 + 34% of AAI over.................. 17,200
$20,101 to $23,000..................... 5,060 + 40% of AAI over.................. 20,100
$23,001 or more........................ 6,220 + 47% of AAI over.................. 23,000
----------------------------------------------------------------------------------------------------------------

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 $2,900 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
------------------------------------------------------------------------
And parents' total
income is--
If parents' State or territory of residence -------------------------
is: less than $15,000 or
$15,000 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 6 5
Mexico, Missouri, West Virginia, Arizona,
Indiana, Oklahoma, Arkansas..................
New Hampshire, Pennsylvania, Colorado, 7 6
Georgia, Kansas, Kentucky, Idaho.............
North Carolina, Virginia, Delaware, South 8 7
Carolina, Ohio, Utah, Nebraska, Montana,
California, New Jersey, Iowa, Vermont, Hawaii
Massachusetts, Rhode Island, Michigan, 9 8
Minnesota, Maine, Maryland...................
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--
If student's State or territory of residence -------------------------
is: Less than $15,000 or
$15,000 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 6 5
Mexico, Missouri, West Virginia, Arizona,
Indiana, Oklahoma, Arkansas..................
New Hampshire, Pennsylvania, Colorado, 7 6
Georgia, Kansas, Kentucky, Idaho.............
North Carolina, Virginia, Delaware, South 8 7
Carolina, Ohio, Utah, Nebraska, Montana,
California, New Jersey, Iowa, Vermont, Hawaii
Massachusetts, Rhode Island, Michigan, 9 8
Minnesota, Maine, Maryland...................
District of Columbia, Wisconsin, Oregon....... 10 9
New York...................................... 11 10

[[Page 34458]]


Other......................................... 4 3
------------------------------------------------------------------------


Dependent Students
------------------------------------------------------------------------
The
If student's State or territory of residence is: percentage
is--
------------------------------------------------------------------------
Alaska, Texas, South Dakota, Wyoming, Washington, 0
Tennessee, Nevada........................................
Florida, New Hampshire.................................... 1
Connecticut, Louisiana, Illinois, North Dakota............ 2
Mississippi, Arizona, Alabama, Pennsylvania, New Jersey, 3
Missouri.................................................
Nebraska, Indiana, Colorado, New Mexico, Oklahoma, Kansas, 4
West Virginia, Rhode Island, Virginia, Georgia, Arkansas,
Vermont, Michigan........................................
Montana, Idaho, Utah, Kentucky, Massachusetts, California, 5
North Carolina, South Carolina, Ohio, Iowa, Delaware,
Maine, Wisconsin.........................................
Oregon, Maryland, Minnesota, Hawaii....................... 6
District of Columbia, New York............................ 7
Other..................................................... 2
------------------------------------------------------------------------


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, 0
Tennessee, Nevada.........................................
Florida, New Hampshire..................................... 1
Connecticut, Louisiana, Illinois, North Dakota............. 2
Mississippi, Arizona, Alabama, Pennsylvania, New Jersey, 3
Missouri..................................................
Nebraska, Indiana, Colorado, New Mexico, Oklahoma, Kansas, 4
West Virginia, Rhode Island, Virginia, Georgia, Arkansas,
Vermont, Michigan.........................................
Montana, Idaho, Utah, Kentucky, Massachusetts, California, 5
North Carolina, South Carolina, Ohio, Iowa, Delaware,
Maine, Wisconsin..........................................
Oregon, Maryland, Minnesota, Hawaii........................ 6
District of Columbia, New York............................. 7
Other...................................................... 2
------------------------------------------------------------------------

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Regulations is available on GPO Access at: http://
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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;
William D. Ford Federal Direct Loan Program, 84.268)


Dated: May 23, 2000.
Jim Lynch,
Acting Chief Operating Officer, Student Financial Assistance.
[FR Doc. 00-13399 Filed 5-26-00; 8:45 am]
BILLING CODE 4000-01-U




]

Last Modified: 05/29/2000