| Publication Date: May 31, 2001 FRPart: |
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| RegPartsAffected: |
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Page Numbers: 29558-29562
Summary: Notice; Revision of the Federal need analysis methody for the 2002-2003
[Federal Register: May 31, 2001 (Volume 66, Number 105)]
[Notices]
[Page 29558-29562]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31my01-50]
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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: Student Financial Assistance, Department of Education.
ACTION: Notice of revision of the Federal need analysis methodology for
the 2002-2003 award year.
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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 2002-2003 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. 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
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 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 2002-2003 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 2000 and December 2001. However, since
the Secretary must publish these tables before December 2001, 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 2000. The Secretary estimates that the increase in the
Consumer Price Index for all Urban Consumers for the period December
2000 through December 2001 will be 2.4 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 2002-2003 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. The income protection
allowance for the dependent student is $2,330. The income protection
allowances for parents of dependent students and independent students
with dependents other than a spouse for award year 2002-2003 are:
[[The chart " Income Protection Allowance" on page 29558 is available for viewing in the Portable Document Format (PDF) file(s) below.]]
The income protection allowances for independent students and
independent students without dependents other than a spouse for award
year 2002-2003 are:
[[The chart " Income Protection Allowance for independent students" on page 29558 is available for viewing in the Portable Document Format (PDF) file(s) below.]]
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
[[Page 29559]]
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, independent student
without dependents other than a spouse, and independent students with
dependents other than a spouse.
[[The chart "Adjusted Net Worth of a Business or Farm" on page 29559 is available for viewing in the Portable Document Format (PDF) file(s) below.]]
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.
[[The chart "Education Savings and Asset Protection Allowance - Dependent Students " on page29559 is available for viewing in the Portable Document Format (PDF) file(s) below.]]
[[The chart "The Education Savings and Asset Protection Allowance -Independent
Students Without Dependents Other Than a Spouse" on page29559 is available
for viewing in the Portable Document Format (PDF) file(s) below.]]
[[The chart "The Education Savings and Asset Protection Allowance -Independent
Students With Dependents Other Than a Spouse" pages 29559-29560 is available
for viewing in the Portable Document Format (PDF) file(s) below.]]
[[Page 29560]]
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:
[[The chart "Assessment Schedules and Rates-Parent contribution for dependent student " on page29560 is available for viewing in the Portable Document Format (PDF) file(s) below.]]
The contribution for an independent student with dependents other
than a spouse is computed according to the following schedule:--
[[The chart "Assessment Schedules and Rates-Contribution for an independent student with dependents" on page29560 is available for viewing in the Portable Document Format (PDF) file(s) below.]]
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.
[[The chart "Allowance for State and Other Taxes - Parents of Dependent Students" on pages 29560-29561 is available for viewing in the Portable Document Format (PDF) file(s) below.]]
[[The chart "Allowance for State and Other Taxes - Independent Students With Dependents Other Than a Spouse" on page 29561 is available for viewing in the Portable Document Format (PDF) file(s) below.]]
[[The chart "Allowance for State and Other Taxes - Dependent Students" on page 29561 is available for viewing in the Portable Document Format (PDF) file(s) below.]]
[[The chart "Allowance for State and Other Taxes -Independent Students
Without Dependents Other Than a Spouse" on page 29561 is available for
viewing in the Portable Document Format (PDF) file(s) below.]]
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 the PDF you must have Adobe Acrobat Reader, which is
available free at this site. If you have questions about using the PDF,
call the U.S. Government
[[Page 29562]]
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 25, 2001.
Greg Woods,
Chief Operating Officer, Student Financial Assistance.
[FR Doc. 01-13636 Filed 5-30-01; 8:45am]
BILLING CODE 4000-01-P