[Federal Register Volume 62, Number 103 (Thursday, May 29, 1997)]
[Notices]
[Pages 29272-29275]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-14068]



[[Page 29271]]

_______________________________________________________________________

Part V





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 1998-99 Award Year; Notice

  Federal Register / Vol. 62, No. 103 / Thursday, May 29, 1997 / 
Notices  

[[Page 29272]]


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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; 
Revision of the Need Analysis Methodology for the 1998-99 Award Year

AGENCY: Department of Education.

ACTION: Notice.

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

SUMMARY: The Secretary of Education announces the annual updates to the 
tables that will be used in the statutory ``Federal Needs Analysis 
Methodology'' to determine a student's expected family contribution 
(EFC) for award year 1998-99 for the Title IV, HEA student financial 
assistance programs (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. 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, 
General Provisions Branch, Policy Development Division, U.S. Department 
of Education, 600 Independence Avenue, S.W. (Room 3053, ROB-3), 
Washington, D.C. 20202-5444, telephone (202) 708-8242. 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: Part F of Title IV of the Higher Education 
Act of 1965, as amended (HEA), specifies the criteria, data elements, 
calculations and tables used in the Federal Needs Analysis Methodology 
EFC calculations.
    Section 478 in Part F 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 1998-99, 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 1996 and December 1997. However, since 
the Secretary must publish these tables before December 1997, 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 1996. The Secretary estimates that the increase in the 
Consumer Price Index for all Urban Consumers for the period December 
1996 through December 1997 will be 2.4 percent. The updated tables for 
the 1998-99 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). The 
Education Savings and Asset Protection Allowance table for the award 
year 1998-99 has been updated below in section 3.
    Section 477(b)(5) of Part F 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 1998-99 are:

----------------------------------------------------------------------------------------------------------------
                                                                 Number in college                              
 Family size (including student) -------------------------------------------------------------------------------
                                         1               2               3               4               5      
----------------------------------------------------------------------------------------------------------------
2...............................         $12,030          $9,980  ..............  ..............  ..............
3...............................          14,990          12,940         $10,880  ..............  ..............
4...............................          18,510          16,450          14,400         $12,340  ..............
5...............................          21,840          19,780          17,730          15,670         $13,630
6...............................          25,550          23,490          21,440          19,380         17,330 
For each additional family member add $2,880.                                                                   
For each additional college student subtract $2,050.                                                            
----------------------------------------------------------------------------------------------------------------

    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.

----------------------------------------------------------------------------------------------------------------
 If the net worth of a business or farm is--                    Then the adjusted net worth is:                 
----------------------------------------------------------------------------------------------------------------
Less than $1................................  $0.                                                               
$1 to $85,000...............................          40% of NW.                                                
$85,001 to $255,000.........................  $34,000+50% of NW over $85,000.                                   
$255,001 to $430,000........................  $119,000+60% of NW over $255,000.                                 
$430,001 or more............................  $224,000+100% of NW over $430,000.                                
----------------------------------------------------------------------------------------------------------------


[[Page 29273]]

    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 parents   One parent
                                                                        
                                               -------------------------
(1)Then the education savings and asset                                 
 protection allowance is--                                              
------------------------------------------------------------------------
25 or less....................................            0            0
26............................................        2,400        1,600
27............................................        4,800        3,300
28............................................        7,300        4,900
29............................................        9,700        6,600
30............................................       12,100        8,200
31............................................       14,500        9,800
32............................................       16,900       11,500
33............................................       19,400       13,100
34............................................       21,800       14,800
35............................................       24,200       16,400
36............................................       26,600       18,000
37............................................       29,000       19,700
38............................................       31,500       21,300
39............................................       33,900       23,000
40............................................       36,300       24,600
41............................................       37,300       25,200
42............................................       38,200       26,700
43............................................       39,200       26,300
44............................................       40,200       26,900
45............................................       41,200       27,400
46............................................       42,300       28,100
47............................................       43,300       28,800
48............................................       44,400       29,300
49............................................       45,500       30,000
50............................................       46,700       30,700
51............................................       48,100       31,500
52............................................       49,400       32,200
53............................................       50,900       33,000
54............................................       52,100       33,800
55............................................       53,700       34,700
56............................................       55,400       35,600
57............................................       57,100       36,400
58............................................       58,800       37,500
59............................................       60,600       38,500
60............................................       62,400       39,400
61............................................       64,500       40,500
62............................................       66,800       41,700
63............................................       68,700       42,900
64............................................       71,100       44,000
65 and over...................................       73,500       45,500
------------------------------------------------------------------------


       Independent Students Without Dependents Other Than a Spouse      
                                                                        
                                                   And the student is   
         If the age of the student is          -------------------------
                                                  Married       Single  
                                                                        
                                               -------------------------
(1)Then the education savings and asset                                 
 protection allowance is--                                              
------------------------------------------------------------------------
25 or less....................................            0            0
26............................................        2,400        1,600
27............................................        4,800        3,300
28............................................        7,300        4,900
29............................................        9,700        6,600
30............................................       12,100        8,200
31............................................       14,500        9,800
32............................................       16,900       11,500
33............................................       19,400       13,100
34............................................       21,800       14,800
35............................................       24,200       16,400
36............................................       26,600       18,000
37............................................       29,000       19,700
38............................................       31,500       21,300
39............................................       33,900       23,000
40............................................       36,300       24,600
41............................................       37,300       25,200
42............................................       38,200       26,700
43............................................       39,200       26,300
44............................................       40,200       26,900
45............................................       41,200       27,400
46............................................       42,300       28,100
47............................................       43,300       28,800
48............................................       44,400       29,300
49............................................       45,500       30,000
50............................................       46,700       30,700
51............................................       48,100       31,500
52............................................       49,400       32,200
53............................................       50,900       33,000
54............................................       52,100       33,800
55............................................       53,700       34,700
56............................................       55,400       35,600
57............................................       57,100       36,400
58............................................       58,800       37,500
59............................................       60,600       38,500
60............................................       62,400       39,400
61............................................       64,500       40,500
62............................................       66,800       41,700
63............................................       68,700       42,900
64............................................       71,100       44,000
65 and over...................................       73,500       45,500
------------------------------------------------------------------------


        Independent Students With Dependents Other Than a Spouse        
                                                                        
                                                   And the student is   
         If the age of the student is          -------------------------
                                                  Married       Single  
                                                                        
                                               -------------------------
(1)Then the education savings and asset                                 
 protection allowance is--                                              
------------------------------------------------------------------------
25 or less....................................            0            0
26............................................        2,400        1,600
27............................................        4,800        3,300
28............................................        7,300        4,900
29............................................        9,700        6,600
30............................................       12,100        8,200
31............................................       14,500        9,800
32............................................       16,900       11,500
33............................................       19,400       13,100
34............................................       21,800       14,800
35............................................       24,200       16,400
36............................................       26,600       18,000
37............................................       29,000       19,700
38............................................       31,500       21,300
39............................................       33,900       23,000
40............................................       36,300       24,600
41............................................       37,300       25,200
42............................................       38,200       26,700
43............................................       39,200       26,300
44............................................       40,200       26,900
45............................................       41,200       27,400
46............................................       42,300       28,100
47............................................       43,300       28,800
48............................................       44,400       29,300
49............................................       45,500       30,000
50............................................       46,700       30,700
51............................................       48,100       31,500
52............................................       49,400       32,200
53............................................       50,900       33,000
54............................................       52,100       33,800
55............................................       53,700       34,700
56............................................       55,400       35,600
57............................................       57,100       36,400
58............................................       58,800       37,500
59............................................       60,600       38,500
60............................................       62,400       39,400
61............................................       64,500       40,500
62............................................       66,800       41,700
63............................................       68,700       42,900
64............................................       71,100       44,000
65 and over...................................       73,500       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.

----------------------------------------------------------------------------------------------------------------
                 If AAI is--                                      Then the contribution is--                    
----------------------------------------------------------------------------------------------------------------
Less than -$3,409...........................  -$750.                                                            
-$3,409 to $10,800..........................            22% of AAI.                                             
$10,801 to $13,500..........................  $2,376 + 25% of AAI over $10,800.                                 
$13,501 to $16,200..........................  $3,051 + 29% of AAI over $13,500.                                 

[[Page 29274]]

                                                                                                                
$16,201 to $19,000..........................  $3,834 + 34% of AAI over $16,200.                                 
$19,001 to $21,700..........................  $4,786 + 40% of AAI over $19,000.                                 
$21,701 or more.............................  $5,866 + 47% of AAI over $21,700.                                 
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                 If AAI is--                                      Then the contribution is--                    
----------------------------------------------------------------------------------------------------------------
Less than -$3,409...........................  -$750.                                                            
-$3,409 to $10,800..........................            22% of AAI.                                             
$10,801 to $13,500..........................  $2,376 + 25% of AAI over $10,800.                                 
$13,501 to $16,200..........................  $3,051 + 29% of AAI over $13,500.                                 
$16,201 to $19,000..........................  $3,834 + 34% of AAI over $16,200.                                 
$19,001 to $21,700..........................  $4,786 + 40% of AAI over $19,000.                                 
$21,701 or more.............................  $5,866 + 47% of AAI over $21,700.                                 
----------------------------------------------------------------------------------------------------------------

    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 dependents other than a spouse, 
and independent students with dependents other than a spouse is the 
lesser of $2,800 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--      
If parents' State or territory of residence is -------------------------
                                                 Less than    $15,000 or
                                                  $15,000        more   
------------------------------------------------------------------------
                                                                        
(1) 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--      
 If student's State or territory of residence  -------------------------
                      is                         Less than    $15,000 or
                                                  $15,000        more   
------------------------------------------------------------------------
                                                                        
(1) 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

[[Page 29275]]

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


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

    Dated: May 23, 1997.
David A. Longanecker,
Assistant Secretary for Postsecondary Education.
(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)

[FR Doc. 97-14068 Filed 5-28-97; 8:45 am]
BILLING CODE 4000-01-P