[Federal Register Volume 66, Number 105 (Thursday, May 31, 2001)]
[Notices]
[Pages 29558-29562]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-13636]


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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.

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

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:

----------------------------------------------------------------------------------------------------------------
                                                                             Number in college
                                                          ------------------------------------------------------
                                                               1          2          3          4          5
----------------------------------------------------------------------------------------------------------------
Family size
    2....................................................     13,210     10,950  .........  .........  .........
    3....................................................     16,450     14,210     11,940  .........  .........
    4....................................................     20,320     18,060     15,810     13,550  .........
    5....................................................     23,980     21,720     19,470     17,210     14,960
    6....................................................     28,050     25,790     23,540     21,280    19,030
For each additional family member add $3,170.
For each additional college student subtract $2,250.
----------------------------------------------------------------------------------------------------------------

    The income protection allowances for independent students and 
independent students without dependents other than a spouse for award 
year 2002-2003 are:

------------------------------------------------------------------------
                                                     Number in
                  Marital status                      college    Amount
------------------------------------------------------------------------
Single............................................          1     $5,300
Married...........................................          2      5,300
Married...........................................          1      8,470
------------------------------------------------------------------------

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.

--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
If the Net Worth of a Business or Farm is--                               Then the Adjusted Net Worth is--
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Less than           $1..............................................           $0
            $1 to  $95,000..............................................           $0 +  40% of NW
       $95,001 to $285,000..............................................      $38,000 +  50% of NW over  $95,000
      $285,001 to $470,000..............................................     $133,000 +  60% of NW over $285,000
      $470,001 or more..................................................     $244,000 + 100% of NW over $470,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

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
------------------------------------------------------------------------
                                                    Then the education
                                                    savings and asset
                                                protection allowance is--
 
                                               -------------------------
25 or less....................................            0            0
26............................................        2,300        1,100
27............................................        4,600        2,200
28............................................        6,900        3,300
29............................................        9,100        4,500
30............................................       11,400        5,600
31............................................       13,700        6,700
32............................................       16,000        7,800
33............................................       18,300        8,900
34............................................       20,600       10,000
35............................................       22,900       11,100
36............................................       25,200       12,200
37............................................       27,400       13,400
38............................................       29,700       14,500
39............................................       32,000       15,600
40............................................       34,300       16,700
41............................................       35,200       17,000
42............................................       36,100       17,400
43............................................       36,700       17,800
44............................................       37,700       18,200
45............................................       38,600       18,600
46............................................       39,600       18,900
47............................................       40,600       19,400
48............................................       41,900       19,900
49............................................       42,900       20,300
50............................................       44,000       20,800
51............................................       45,100       21,200
52............................................       46,500       21,700
53............................................       47,600       22,400
54............................................       49,100       22,900
55............................................       50,300       23,400
56............................................       51,800       24,000
57............................................       53,300       24,700
58............................................       54,900       25,300
59............................................       56,600       26,000
60............................................       58,300       26,600
61............................................       60,000       27,400
62............................................       62,000       28,100
63............................................       63,800       28,900
64............................................       66,000       29,700
65 and over...................................       68,200       30,700
------------------------------------------------------------------------


       Independent Students Without Dependents Other Than a Spouse
------------------------------------------------------------------------
                                                  And the student is--
        If the age of the student is--         -------------------------
                                                  Married       Single
------------------------------------------------------------------------
                                                   Then the education
                                                    savings and asset
                                                protection allowance is--
 
                                               -------------------------
25 or less....................................            0            0
26............................................        2,300        1,100
27............................................        4,600        2,200
28............................................        6,900        3,300
29............................................        9,100        4,500
30............................................       11,400        5,600
31............................................       13,700        6,700
32............................................       16,000        7,800
33............................................       18,300        8,900
34............................................       20,600       10,000
35............................................       22,900       11,100
36............................................       25,200       12,200
37............................................       27,400       13,400
38............................................       29,700       14,500
39............................................       32,000       15,600
40............................................       34,300       16,700
41............................................       35,200       17,000
42............................................       36,100       17,400
43............................................       36,700       17,800
44............................................       37,700       18,200
45............................................       38,600       18,600
46............................................       39,600       18,900
47............................................       40,600       19,400
48............................................       41,900       19,900
49............................................       42,900       20,300
50............................................       44,000       20,800
51............................................       45,100       21,200
52............................................       46,500       21,700
53............................................       47,600       22,400
54............................................       49,100       22,900
55............................................       50,300       23,400
56............................................       51,800       24,000
57............................................       53,300       24,700
58............................................       54,900       25,300
59............................................       56,600       26,000
60............................................       58,300       26,600
61............................................       60,000       27,400
62............................................       62,000       28,100
63............................................       63,800       28,900
64............................................       66,000       29,700
65 and over...................................       68,200       30,700
------------------------------------------------------------------------


        Independent Students With Dependents Other Than a Spouse
------------------------------------------------------------------------
                                                  And the student is--
        If the age of the student is--         -------------------------
                                                  Married       Single
------------------------------------------------------------------------
                                                   Then the education
                                                    savings and asset
                                                protection allowance is--
 
                                               -------------------------
25 or less....................................            0            0
26............................................        2,300        1,100
27............................................        4,600        2,200
28............................................        6,900        3,300
29............................................        9,100        4,500
30............................................       11,400        5,600
31............................................       13,700        6,700
32............................................       16,000        7,800
33............................................       18,300        8,900
34............................................       20,600       10,000
35............................................       22,900       11,100
36............................................       25,200       12,200
37............................................       27,400       13,400
38............................................       29,700       14,500
39............................................       32,000       15,600
40............................................       34,300       16,700
41............................................       35,200       17,000
42............................................       36,100       17,400
43............................................       36,700       17,800
44............................................       37,700       18,200
45............................................       38,600       18,600
46............................................       39,600       18,900
47............................................       40,600       19,400
48............................................       41,900       19,900
49............................................       42,900       20,300
50............................................       44,000       20,800
51............................................       45,100       21,200
52............................................       46,500       21,700
53............................................       47,600       22,400
54............................................       49,100       22,900
55............................................       50,300       23,400
56............................................       51,800       24,000
57............................................       53,300       24,700
58............................................       54,900       25,300
59............................................       56,600       26,000
60............................................       58,300       26,600

[[Page 29560]]

 
61............................................       60,000       27,400
62............................................       62,000       28,100
63............................................       63,800       28,900
64............................................       66,000       29,700
65 and over...................................       68,200       30,700
------------------------------------------------------------------------

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:

--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
If AAI is--                                                               Then the Contribution is--
--------------------------------------------------------------------------------------------------------------------------------------------------------
  Less than -$3,409  ($3,409)...........................................     -$750
          ($3,409) to $11,800...........................................                22% of AAI
          $11,801 to $14,800............................................     $2,596 + 25% of AAI over $11,800
          $14,801 to $17,800............................................     $3,346 + 29% of AAI over $14,800
          $17,801 to $20,800............................................     $4,216 + 34% of AAI over $17,800
          $20,801 to $23,900............................................     $5,236 + 40% of AAI over $20,800
          $23,901  or  more.............................................     $6,476 + 47% of AAI over $23,900
--------------------------------------------------------------------------------------------------------------------------------------------------------

    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  $11,800.........................................              22% of AAI
          $11,801  to  $14,800..........................................     $2,596 + 25% of AAI over $11,800
          $14,801  to  $17,800..........................................     $3,346 + 29% of AAI over $14,800
          $17,801  to  $20,800..........................................     $4,216 + 34% of AAI over $17,800
          $20,801  to  $23,900..........................................     $5,236 + 40% of AAI over $20,800
          $23,901  or  more.............................................     $6,476 + 47% of AAI over $23,900
--------------------------------------------------------------------------------------------------------------------------------------------------------

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.

                      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
------------------------------------------------------------------------
                                             Then the percentage is--
                                         -------------------------------
Wyoming, Tennessee, Nevada, Alaska,                    3               2
 Texas..................................
Louisiana, Florida, Washington, South                  4               3
 Dakota.................................
Alabama, Mississippi....................               5               4
North Dakota, Illinois, Connecticut, New               6               5
 Mexico, Missouri, West Virginia,
 Arizona, Indiana, Oklahoma, Arkansas...
New Hampshire, Pennsylvania, Colorado,                 7               6
 Georgia, Kansas, Kentucky, Idaho.......
North Carolina, Virginia, Delaware,                    8               7
 South Carolina, Ohio, Utah, Nebraska,
 Montana, California, New Jersey, Iowa,
 Vermont, Hawaii........................
Massachusetts, Rhode Island, Michigan,                 9               8
 Minnesota, Maine, Maryland.............

[[Page 29561]]

 
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
------------------------------------------------------------------------
                                              Then the percentage is--
                                         -------------------------------
Wyoming, Tennessee, Nevada, Alaska,                    3               2
 Texas..................................
Louisiana, Florida, Washington, South                  4               3
 Dakota.................................
Alabama, Mississippi....................               5               4
North Dakota, Illinois, Connecticut, New               6               5
 Mexico, Missouri, West Virginia,
 Arizona, Indiana, Oklahoma, Arkansas...
New Hampshire, Pennsylvania, Colorado,                 7               6
 Georgia, Kansas, Kentucky, Idaho.......
North Carolina, Virginia, Delaware,                    8               7
 South Carolina, Ohio, Utah, Nebraska,
 Montana, California, New Jersey, Iowa,
 Vermont, Hawaii........................
Massachusetts, Rhode Island, Michigan,                 9               8
 Minnesota, Maine, Maryland.............
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,                      0
 Tennessee, Nevada......................................
Florida, New Hampshire..................................               1
Connecticut, Louisiana, Illinois, North Dakota..........               2
Mississippi, Arizona, Alabama, Pennsylvania, New Jersey,               3
 Missouri...............................................
Nebraska, Indiana, Colorado, New Mexico, Oklahoma,                     4
 Kansas, West Virginia, Rhode Island, Virginia, Georgia,
 Arkansas, Vermont, Michigan............................
Montana, Idaho, Utah, Kentucky, Massachusetts,                         5
 California, North Carolina, South Carolina, Ohio, Iowa,
 Delaware, Maine, Wisconsin.............................
Oregon, Maryland, Minnesota, Hawaii.....................               6
District of Columbia, New York..........................               7
Other...................................................               2
------------------------------------------------------------------------


       Independent Students Without Dependents Other Than a Spouse
------------------------------------------------------------------------
                                                          The percentage
    If student's State or territory of residence is--          is--
------------------------------------------------------------------------
Alaska, Texas, South Dakota, Wyoming, Washington,                      0
 Tennessee, Nevada......................................
Florida, New Hampshire..................................               1
Connecticut, Louisiana, Illinois, North Dakota..........               2
Mississippi, Arizona, Alabama, Pennsylvania, New Jersey,               3
 Missouri...............................................
Nebraska, Indiana, Colorado, New Mexico, Oklahoma,                     4
 Kansas, West Virginia, Rhode Island, Virginia, Georgia,
 Arkansas, Vermont, Michigan............................
Montana, Idaho, Utah, Kentucky, Massachusetts,                         5
 California, North Carolina, South Carolina, Ohio, Iowa,
 Delaware, Maine, Wisconsin.............................
Oregon, Maryland, Minnesota, Hawaii.....................               6
District of Columbia, New York..........................               7
Other...................................................               2
------------------------------------------------------------------------

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