[Federal Register Volume 63, Number 104 (Monday, June 1, 1998)]
[Notices]
[Pages 29894-29897]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-14426]



[[Page 29893]]

_______________________________________________________________________

Part XII





Department of Education





_______________________________________________________________________



Office of Postsecondary Education; Notice of Revision of the Need 
Analysis Methodology for the 1999-2000 Award Year; Notice

  Federal Register / Vol. 63, No. 104 / Monday, June 1, 1998 / 
Notices  

[[Page 29894]]



DEPARTMENT OF EDUCATION


Office of Postsecondary Education; Notice of Revision of the Need 
Analysis Methodology for the 1999-2000 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 1999-2000 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 Ave., S.W. (Room 3053, ROB-3), 
Washington, D.C. 20202-5444, telephone (202) 708-8242. Individuals who 
use a telecommunications device for the deaf (TDD) may call the Federal 
Information Relay Service (FIRS) at 1-800-877-8339 between 8 a.m. and 8 
p.m., Eastern time Monday through Friday. 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 this paragraph.

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 Need 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 
inflation into account. The changes are based, in general, upon 
increases in the Consumer Price Index.
    For the award year 1999-2000, 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 1997 and December 1998. 
However, since the Secretary must publish these tables before December 
1998, 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 1997. The Secretary estimates that the increase 
in the Consumer Price Index for all Urban Consumers for the period 
December 1997 through December 1998 will be 2.5 percent. The updated 
tables 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 1999-2000 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 award year 1999-2000 are:

----------------------------------------------------------------------------------------------------------------
                                                                        Number in college                       
                  Family size                   ----------------------------------------------------------------
                                                      1            2            3            4            5     
----------------------------------------------------------------------------------------------------------------
2..............................................       12,260       10,160  ...........  ...........  ...........
3..............................................       15,260       13,180       11,080  ...........  ...........
4..............................................       18,850       16,750       14.670       12,570  ...........
5..............................................       22,240       20,140       18,060       15,960       13,880
6..............................................       26,010       23,920       21,830       19,740       17,650
----------------------------------------------------------------------------------------------------------------
 For each addiional family member add $2,940.                                                                   
 For each additional college student subtract 2,090.                                                            

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 new worth is
------------------------------------------------------------------------
Less than $1...........................  0                              
$1 to $85,000..........................  $0 + 40% of NW                 
$85,001 to $260,000....................  $34,000 + 50% of NW over       
                                          $85,000                       
$260,001 to $435,000...................  $121,500 + 60% of NW over      
                                          $266,00.                      
$435,001 or more.......................  $226,500 + 100% of NW over     
                                          $435,000                      
------------------------------------------------------------------------


[[Page 29895]]

3. Education Savingss 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     
                                               -------------------------
                                                               then the 
                                                              education 
       If the age of the older parent is        two parents  savings and
                                                       one      asset   
                                                   parent     protection
                                                              allowance 
                                                                  is    
------------------------------------------------------------------------
25 or less....................................            0            0
26............................................        2,500        1,600
27............................................        5,000        3,200
28............................................        7,500        4,800
29............................................       10,000        6,400
30............................................       12,500        8,000
31............................................       15,000        9,600
32............................................       17,500       11,200
33............................................       19,900       12,900
34............................................       22,400       14,500
35............................................       24,900       16,100
36............................................       27,400       17,700
37............................................       29,900       19,300
38............................................       32,400       20,900
39............................................       34,900       22,500
40............................................       37,400       24,100
41............................................       38,400       24,500
42............................................       39,400       25,100
43............................................       40,400       25,600
44............................................       41,400       26,200
45............................................       42,500       26,800
46............................................       43,500       27,400
47............................................       44,600       28,000
48............................................       45,800       28,700
49............................................       46,900       29,400
50............................................       48,400       30,100
51............................................       49,600       30,700
52............................................       50,900       31,600
53............................................       52,500       32,300
54............................................       53,800       33,100
55............................................       55,400       33,900
56............................................       57,100       34,700
57............................................       58,900       35,700
58............................................       60,700       36,500
59............................................       62,500       37,600
60............................................       64,400       38,700
61............................................       66,600       39,700
62............................................       69,000       40,900
63............................................       71,000       42,000
64............................................       73,400       43,200
65 and over...................................       75,900       44,400
------------------------------------------------------------------------


       Independent Students Without Dependents Other Than a Spouse      
------------------------------------------------------------------------
                                                  And the student is    
                                             ---------------------------
                                                               then the 
                                                              education 
        If the age of the student is                         savings and
                                                 married        asset   
                                                  single      protection
                                                              allowance 
                                                                  is    
------------------------------------------------------------------------
25 or less..................................             0             0
26..........................................         2,500         1,600
27..........................................         5,000         3,200
28..........................................         7,500         4,800
29..........................................        10,000         6,400
30..........................................        12,500         8,000
31..........................................        15,000         9,600
32..........................................        17,500        11,200
33..........................................        19,900        12,900
34..........................................        22,400        14,500
35..........................................        24,900        16,100
36..........................................        27,400        17,700
37..........................................        29,900        19,300
38..........................................        32,400        20,900
39..........................................        34,900        22,500
40..........................................        37,400        24,100
41..........................................        38,400        24,500
42..........................................        39,400        25,100
43..........................................        40,400        25,600
44..........................................        41,400        26,200
45..........................................        42,500        26,800
46..........................................        43,500        27,400
47..........................................        44,600        28,000
48..........................................        45,800        28,700
49..........................................        46,900        29,400
50..........................................        48,400        30,100
51..........................................        49,600        30,700
52..........................................        50,900        31,600
53..........................................        52,500        32,300
54..........................................        53,800        33,100
55..........................................        55,400        33,900
56..........................................        57,100        34,700
57..........................................        58,900        35,700
58..........................................        60,700        36,500
59..........................................        62,500        37,600
60..........................................        64,400        38,700
61..........................................        66,600        39,700
62..........................................        69,000        40,900
63..........................................        71,000        42,000
64..........................................        73,400        43,200
65 and over.................................        75,900        44,400
------------------------------------------------------------------------


        Independent Students With Dependents Other Than a Spouse        
------------------------------------------------------------------------
                                                  And the student is    
                                             ---------------------------
                                                               then the 
                                                              education 
        If the age of the student is                         savings and
                                                 married        asset   
                                                  single      protection
                                                              allowance 
                                                                  is    
------------------------------------------------------------------------
25 or less..................................             0             0
26..........................................         2,500         1,600
27..........................................         5,000         3,200
28..........................................         7,500         4,800
29..........................................        10,000         6,400
30..........................................        12,500         8,000
31..........................................        15,000         9,600
32..........................................        17,500        11,200
33..........................................        19,900        12,900
34..........................................        22,400        14,500
35..........................................        24,900        16,100
36..........................................        27,400        17,700
37..........................................        29,900        19,300
38..........................................        32,400        20,900
39..........................................        34,900        22,500
40..........................................        37,400        24,100
41..........................................        38,400        24,500
42..........................................        39,400        25,100
43..........................................        40,400        26,600
44..........................................        41,400        26,200
45..........................................        42,500        26,800
46..........................................        43,500        27,400
47..........................................        44,600        28,000
48..........................................        45,800        28,700
49..........................................        46,900        29,400
50..........................................        48,400        30,100
51..........................................        49,600        30,700
52..........................................        50,900        31,600
53..........................................        52,500        32,300
54..........................................        53,800        33,200
55..........................................        55,400        33,900
56..........................................        57,100        34,700
57..........................................        58,900        35,700
59..........................................        62,500        37,600
60..........................................        64,400        38,700
61..........................................        66,600        39,700
62..........................................        69,000        40,900
63..........................................        71,000        42,000
64..........................................        73,400        43,200
65 and over.................................        75,900        44,400
------------------------------------------------------------------------

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:

[[Page 29896]]



------------------------------------------------------------------------
               If AAI is                     Then the contribution is   
------------------------------------------------------------------------
Less than -$3,409 ($3,409).............  $-750                          
($3,409) to $11,000....................   22% of AAI                    
$11,001 to $13,700.....................  $2,420+ 25% of AAI over $11,000
$13,701 to $16,500.....................  $3,095+ 29% of AAI over $13,700
$16,501 to $19,300.....................  $3,907+ 34% of AAI over $16,500
$19,301 to $22,100.....................  $4,859+ 40% of AAI over $19,300
$22,101 or more........................  $5,979+ 47% of AAI over $22,100
------------------------------------------------------------------------

    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 $11,000....................  22% of AAI                     
$11,001 to $13,700.....................  $2,420+25% of AAI over $11,000 
$13,701 to $16,500.....................  $3,095+29% of AAI over $13,700 
$16,501 to $19,300.....................  $3,907+34% of AAI over $16,500 
$19,301 to $22,100.....................  $4,859+40% of AAI over $19,300 
$22,101 or more........................  $5,979+47% of AAI over $22,100 
------------------------------------------------------------------------

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       
                                               -------------------------
                                                 less than    $15,000 or
If parents' State or territory of residence is   $15,000 or      more   
                                               -------------------------
                                                  then the     then the 
                                                 percentage   percentage
                                                     is           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
------------------------------------------------------------------------


[[Page 29897]]


        Independent Students With Dependents Other Than a Spouse        
------------------------------------------------------------------------
                                                   And student's total  
                                                        income is       
                                               -------------------------
                                                 less than    $15,000 or
 If student's State or territory of residence    $15,000 or      more   
                      is                       -------------------------
                                                  then the     then the 
                                                 percentage   percentage
                                                     is           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
------------------------------------------------------------------------


                           Dependent Students                           
------------------------------------------------------------------------
                                                          The percentage
     If student's State or territory of residence is            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
------------------------------------------------------------------------

Electronic Access to This Document

    Anyone may view this document, as well as all other Department of 
Education documents published in the Federal Register, in text or 
portable document format (pdf) on the World Wide Web at either of the 
following sites:

http://ocfo.ed.gov/fedreg.htm
http://www.ed.gov/news.html

    To use the pdf you must have the Adobe Acrobat Reader Program with 
Search, which is available free through either of the previous sites. 
If you have questions about using the pdf, call the U.S. Government 
Printing Office toll free at 1-888-293-6498.

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

(CFDA Nos.: 84.063  Federal Pell Grant; 84.038  Federal Perkins 
Loan; 84.033  Federal Work-Study; 84.007  Federal Supplemental 
Educational Opportunity Grant; 84.032  Federal Family Education 
Loan; and 84.268  William D. Ford Federal Direct Loan Programs)

    Dated: May 27, 1998.
David A. Longanecker,
Assistant Secretary for Postsecondary Education.
[FR Doc. 98-14426 Filed 5-29-98; 8:45 am]
BILLING CODE 4000-01-P