[Federal Register Volume 67, Number 105 (Friday, May 31, 2002)]
[Notices]
[Pages 38079-38083]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-13704]


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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: Federal Student Aid, Department of Education.

ACTION: Notice of revision of the Federal need analysis Methodology for 
the 2003-2004 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 2003-2004 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, Management and Program 
Analyst, U.S. Department of Education, Federal Student Aid, Union 
Center Plaza, 830 First Street NE, Washington, DC 20002-5345. 
Telephone: (202) 377-3231.
    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 under FOR FURTHER 
INFORMATION CONTACT.

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 2003-2004 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 2001 and December 2002. However, since 
the Secretary must publish these tables before December 2002, 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 2001. The Secretary estimates that the increase in the 
Consumer Price Index for all urban Consumers for the period December 
2001 through December 2002 will be 2.8 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 of 
asset protection allowances as provided for in section 478 (d) of the 
HEA. The Education Savings and Asset Protection Allowance table for the 
award year 2003-2004 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 and number in college. The income protection allowance for 
the dependent student is $2,380. The income protection allowances for 
parents of dependent students and independent students with dependents 
other than a spouse for award year 2003-2004 are:

[[Page 38080]]



----------------------------------------------------------------------------------------------------------------
                                                                       Number in College--
                                                ----------------------------------------------------------------
                                                      1            2            3            4            5
----------------------------------------------------------------------------------------------------------------
Family size:
    2..........................................       13,470       11,160  ...........  ...........  ...........
    3..........................................       16,770       14,480       12,170  ...........  ...........
    4..........................................       20,710       18,410       16,120       13,810  ...........
    5..........................................       24,440       22,130       19,840       17,540       15,240
    6..........................................       28,580       26,280       23,900       21,680      19,390
----------------------------------------------------------------------------------------------------------------
For each additional family member add $3,230.
For each additional college student substract $2,290.

    The income protection allowances for single independent students 
and for independent students without dependents other than a spouse for 
award year 2003-2004 are:

------------------------------------------------------------------------
                                                    Number in
                  Marital status                     college     Amount
------------------------------------------------------------------------
Single...........................................          1      $5,400
Married..........................................          2       5,400
Married..........................................          1       8,640
------------------------------------------------------------------------

    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 
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  Then the adjusted net worth is--
                  is--
------------------------------------------------------------------------
Less than $1...........................  $0
  $1 to $95,000........................  $0 + 40% of NW
  $95,001 to $290,000..................  $38,000 + 50% of NW over
                                          $95,000
  $290,001 to $480,000.................  $135,000 + 60% of NW over
                                          $290,000
  $480,001 or more.....................  $249,500 + 100% of NW over
                                          $480,000
------------------------------------------------------------------------

    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 of parents of dependent 
students, one for independent students without dependents other than a 
spouse, and one for the 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............................................        2,500        1,200
27............................................        5,000        2,500
28............................................        7,500        3,700
29............................................        9,900        5,000
30............................................       12,400        6,200
31............................................       14,900        7,400
32............................................       17,400        8,700
33............................................       19,900        9,900
34............................................       22,400       11,200
35............................................       24,900       12,400
36............................................       27,400       13,600
37............................................       29,800       14,900
38............................................       32,300       16,100
39............................................       34,800       17,400
40............................................       37,300       18,600
41............................................       38,200       19,000
42............................................       39,200       19,400
43............................................       40,200       19,800
44............................................       41,200       20,300
45............................................       42,200       20,700
46............................................       43,300       21,100
47............................................       44,300       21,600
48............................................       45,400       22,200
49............................................       46,600       22,600
50............................................       47,700       23,100
51............................................       49,200       23,700
52............................................       50,400       24,200
53............................................       51,700       24,800
54............................................       53,200       25,400
55............................................       54,500       26,200
56............................................       56,200       26,800
57............................................       57,900       27,400
58............................................       59,600       28,200
59............................................       61,400       28,900
60............................................       63,200       29,700
61............................................       65,100       30,500
62............................................       67,300       31,200
63............................................       69,200       32,100
64............................................       71,600       33,100
65 and over...................................       74,000       34,100
------------------------------------------------------------------------


       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............................................        2,500        1,200
27............................................        5,000        2,500
28............................................        7,500        3,700
29............................................        9,900        5,000
30............................................       12,400        6,200
31............................................       14,900        7,400
32............................................       17,400        8,700
33............................................       19,900        9,900
34............................................       22,400       11,200
35............................................       24,900       12,400
36............................................       27,400       13,600
37............................................       29,800       14,900
38............................................       32,300       16,100
39............................................       34,800       17,400
40............................................       37,300       18,600
41............................................       38,200       19,000
42............................................       39,200       19,400
43............................................       40,200       19,800
44............................................       41,200       20,300
45............................................       42,200       20,700
46............................................       43,300       21,100
47............................................       44,300       21,600
48............................................       45,400       22,200
49............................................       46,600       22,600
50............................................       47,700       23,100
51............................................       49,200       23,700

[[Page 38081]]

 
52............................................       50,400       24,200
53............................................       51,700       24,800
54............................................       53,200       25,400
55............................................       54,500       26,200
56............................................       56,200       26,800
57............................................       57,900       27,400
58............................................       59,600       28,200
59............................................       61,400       28,900
60............................................       63,200       29,700
61............................................       65,100       30,500
62............................................       67,300       31,200
63............................................       69,200       32,100
64............................................       71,600       33,100
65 and over...................................       74,000       34,100
------------------------------------------------------------------------


        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............................................        2,500        1,200
27............................................        5,000        2,500
28............................................        7,500        3,700
29............................................        9,900        5,000
30............................................       12,400        6,200
31............................................       14,900        7,400
32............................................       17,400        8,700
33............................................       19,900        9,900
34............................................       22,400       11,200
35............................................       24,900       12,400
36............................................       27,400       13,600
37............................................       29,800       14,900
38............................................       32,300       16,100
39............................................       34,800       17,400
40............................................       37,300       18,600
41............................................       38,200       19,000
42............................................       39,200       19,400
43............................................       40,200       19,800
44............................................       41,200       20,300
45............................................       42,200       20,700
46............................................       43,300       21,100
47............................................       44,300       21,600
48............................................       45,400       22,200
49............................................       46,600       22,600
50............................................       47,400       23,100
51............................................       49,200       23,700
52............................................       50,400       24,200
53............................................       51,700       24,800
54............................................       53,200       25,400
55............................................       54,500       26,200
56............................................       56,200       26,800
57............................................       57,900       27,400
58............................................       59,600       28,200
59............................................       61,400       28,900
60............................................       63,200       29,700
61............................................       65,100       30,500
62............................................       67,300       31,200
63............................................       69,200       32,100
64............................................       71,600       33,100
65 and over...................................       74,000       34,100
------------------------------------------------------------------------

    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 $12,000.....................  ........................  22% of AAI
$12,001 to $15,100......................  $2,640 +                  25% of AAI over $12,000
$15,101 to $18,200......................  $3,415 +                  29% of AAI over $15,100
$18,201 to $21,200......................  $4,314 +                  34% of AAI over $18,200
$21,201 to $24,300......................  $5,334 +                  40% of AAI over $21,200
$24,301 or more.........................  $6,574 +                  47% of AAI over $24,300
----------------------------------------------------------------------------------------------------------------

    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 $12,000.....................  ........................  22% of AAI
$12,001 to $15,100......................  $2,640 +                  25% of AAI over $12,000
$15,101 to $18,200......................  $3,415 +                  29% of AAI over $15,100
$18,201 to $21,200......................  $4,314 +                  34% of AAI over $18,200
$21,201 to $24,300......................  $5,334 +                  40% of AAI over $21,200
$24,301 or more.........................  $6,574 +                  47% of AAI over $24,300
----------------------------------------------------------------------------------------------------------------

    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

[[Page 38082]]

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, Texas...             3             2
Louisiana, Florida, Washington, South Dakota             4             3
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, South                8             7
 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
------------------------------------------------------------------------


        Independent Students With Dependents Other Than a Spouse
------------------------------------------------------------------------
                                              And student's total income
                                                         is--
     If student's State or territory for     ---------------------------
               residence is--                   less than    $15,000 or
                                                 $15,000        more
------------------------------------------------------------------------
                                                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                 6             5
 Mexico, Missouri, West Virginia, Arizona,
 Indiana, Oklahoma, Arkansas................
New Hampshire, Pennsylvania, Colorado,                   7             6
 Georgia, Kansas, Kentucky, Idaho...........
North Carolina, Virginia, Delaware, South                8             7
 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...............................................

[[Page 38083]]

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

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(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 28, 2002.
Candy Kane,
Acting Chief Operating Officer, Federal Student Aid.
[FR Doc. 02-13704 Filed 5-30-02; 8:45 am]
BILLING CODE 4000-01-M