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Subject: Federal Need Analysis Methodology for the 2014-15 Award Year

Publication Date: May 20, 2013

Posted Date: May 20, 2013

Subject: Federal Need Analysis Methodology for the 2014-15 Award Year

FR Type: Notice

[Federal Register Volume 78, Number 97 (Monday, May 20, 2013)]
[Pages 29353-29359]
From the Federal Register Online via the Government Printing Office []
[FR Doc No: 2013-11982]



Federal Need Analysis Methodology for the 2014-15 Award Year--
Federal Pell Grant, Federal Perkins Loan, Federal Work-Study, Federal 
Supplemental Educational Opportunity Grant, William D. Ford Federal 
Direct Loan, Iraq and Afghanistan Service Grant and TEACH Grant 

AGENCY: Federal Student Aid, Department of Education.

ACTION: Notice.


    Catalog of Federal Domestic Assistance (CFDA) Numbers: 84.063; 
84.038; 84.033; 84.007; 84.268; 84.408; 84.379.
SUMMARY: The Secretary announces the annual updates to the tables used 
in the statutory Federal Need Analysis Methodology that determines a 
student's expected family contribution (EFC) for award year 2014-2015 
for these student financial aid programs. The intent of this notice is 
to alert the financial aid community and the broader public, to these 
required annual updates used in the determination of student aid 

FOR FURTHER INFORMATION CONTACT: Marya Dennis, 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) or a text 
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-

SUPPLEMENTARY INFORMATION: Part F of title IV of the Higher Education 
Act of 1965, as amended (HEA), specifies the criteria, data elements, 
calculations, and tables the Department uses in the Federal Need 
Analysis Methodology to determine the EFC.
    Section 478 of part F of title IV of the HEA requires the Secretary 
to annually update four tables for general price inflation--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. The changes are based, in general, upon increases 
in the Consumer Price Index (CPI).
    For award year 2014-2015, the Secretary is charged with updating 
the income protection allowance for parents of dependent students, 
adjusted net worth of a business or farm, the Education Savings and 
Asset Protection Allowance, and the assessment schedules and rates to 
account for inflation that took place between

[[Page 29354]]

December 2012 and December 2013. However, because the Secretary must 
publish these tables before December 2013, the increases in the tables 
must be based on a percentage equal to the estimated percentage 
increase in the Consumer Price Index for All Urban Consumers (CPI-U) 
for 2013. The Secretary must also account for any misestimation of 
inflation for the immediately preceding year.
    In developing the table values for the 2013-14 award year, the 
Secretary assumed a 2.2 percent increase in the CPI-U for the period 
December 2011 through December 2012. Actual inflation for this time 
period was 2.1 percent. The Secretary estimates that the increase in 
the CPI-U for the period December 2012 through December 2013 will be 
2.5 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 affecting the income protection allowance (IPA) tables for the 
2009-2010 through 2012-2013 award years and indexed the annual update 
by a percentage of the estimated Consumer Price Index thereafter. These 
changes to the IPA impact dependent students, as well as independent 
students with dependents other than a spouse and independent students 
without dependents other than a spouse. As amended by the CCRAA, this 
notice includes the new 2014-2015 award year values for the IPA tables. 
The updated tables are in sections 1, 2, and 4 of this notice.
    As provided for in section 478(d) of the HEA, for each award year 
the Secretary must also revise the education savings and asset 
protection allowances. The Education Savings and Asset Protection 
Allowance table for award year 2014-2015 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 on increases in the Bureau of 
Labor Statistics budget of the marginal costs for a two-worker family 
compared to a one-worker family. The items covered by this calculation 
are: food away from home, apparel, transportation, and household 
furnishings, and operations. The Employment Expense Allowance table for 
award year 2014-2015 has been updated in section 5 of this notice.
    The HEA requires 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. The allowance 
varies by family size. The IPA for the dependent student is $6,260. The 
IPAs for parents of dependent students for award year 2014-2015 are as 


 Accessible Format: Individuals with disabilities can obtain this 
document in an accessible format (e.g., braille, large print, 
audiotape, or compact disc) on request to the contact person listed

[[Page 29359]]

    Electronic Access to This Document: 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 via the Federal Digital System 
at: At this site you can view this document, as well 
as all other documents of this Department published in the Federal 
Register, in text or Adobe Portable Document Format (PDF). To use PDF 
you must have Adobe Acrobat Reader, which is available free at this 
    You may also access documents of the Department published in the 
Federal Register by using the article search feature at: Specifically, through the advanced search 
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by the Department.

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

    Dated: May 15, 2013.
James W. Runcie,
Chief Operating Officer, Federal Student Aid.
[FR Doc. 2013-11982 Filed 5-17-13; 8:45 am]

Last Modified: 05/19/2013