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Subject: Federal Need Analysis Methodology for the 2015-2016 Award Year

Publication Date: May 30, 2014

Posted Date: May 30, 2014

Subject: Federal Need Analysis Methodology for the 2015-2016 Award Year

FR Type: Notice

[Federal Register Volume 79, Number 104 (Friday, May 30, 2014)]
[Pages 31103-31109]
From the Federal Register Online via the Government Printing Office []
[FR Doc No: 2014-12569]



Federal Need Analysis Methodology for the 2015-16 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

[[Page 31104]]

statutory Federal Need Analysis Methodology that determines a student's 
expected family contribution (EFC) for award year 2015-16 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 eligibility.

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 the following four tables for 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 updates are based, in general, upon 
increases in the Consumer Price Index (CPI).
    For award year 2015-16, 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 December 2013 and December 2014. 
However, because the Secretary must publish these tables before 
December 2014, 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 2014. The Secretary 
must also account for any misestimation of inflation for the 
immediately preceding year.
    In developing the table values for the 2014-15 award year, the 
Secretary assumed a 2.5 percent increase in the CPI-U for the period 
December 2012 through December 2013. Actual inflation for this time 
period was 1.5 percent. The Secretary estimates that the increase in 
the CPI-U for the period December 2013 through December 2014 will be 
1.8 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 affecting the income protection allowance (IPA) tables for the 
2009-10 through 2012-13 award years and required the Department to use 
a percentage of the estimated Consumer Price Index to update the table 
in subsequent years. 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 2015-16 award 
year values for the IPA tables. The updated tables are in sections 1 
(Income Protection allowance), 2 (Adjusted Net Worth (NW) of a Business 
or Farm), and 4 (Assessment Schedules and Rates) of this notice.
    As provided for in HEA section 478(d), the Secretary must also 
revise the education savings and asset protection allowances for each 
award year. The Education Savings and Asset Protection Allowance table 
for award year 2015-16 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' marginal costs budget 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 2015-16 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 $6,310. The 
IPAs for parents of dependent students for award year 2015-16 are as 


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

    Dated: May 27, 2014.
James W. Runcie,
Chief Operating Officer Federal Student Aid.
[FR Doc. 2014-12569 Filed 5-29-14; 8:45 am]

Last Modified: 05/29/2014