[Federal Register Volume 72, Number 105 (Friday, June 1, 2007)]
[Notices]
[Pages 30568-30572]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-10621]


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DEPARTMENT OF EDUCATION


Federal Pell Grant, Academic Competitiveness Grant, National 
Science and Mathematics Access To Retain Talent 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, U.S. Department of Education.

ACTION: Notice of revision of the Federal Need Analysis Methodology for 
the 2008-2009 award year.

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

SUMMARY: The Secretary 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 
2008-2009 for the student financial aid programs authorized under Title 
IV of the Higher Education Act of 1965, as amended (HEA). 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 
programs include the Federal Pell Grant, Academic Competitiveness 
Grant, National Science and Mathematics Access to Retain Talent Grant, 
Federal Perkins Loan, Federal Work-Study, Federal Supplemental 
Educational Opportunity Grant, Federal Family Education Loan, and 
William D. Ford Federal Direct Loan Programs (Title IV HEA Programs).

FOR FURTHER INFORMATION CONTACT: Ms. Marya Dennis, Management and 
Program Analyst, U.S. Department of Education, Union Center Plaza, 830 
First Street, NE., Washington, DC 20202. Telephone: (202) 377-3385. If 
you use a telecommunications device for the deaf (TDD), you may call 
the Federal Relay Service (FRS) 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 Title IV requires the Secretary to adjust 
four of the tables--the Income Protection Allowance, the Adjusted Net 
Worth of a Farm or Business, the Education Savings and Asset Protection 
Allowance, and the Assessment Schedules and Rates--each award year to 
adjust for general price inflation. The changes are based, in general, 
upon increases in the Consumer Price Index.
    For award year 2008-2009 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 2006 and December 2007. However, because 
the Secretary must publish these tables before December 2007, 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 2006. The Secretary estimates that the increase in the 
Consumer Price Index for All Urban Consumers (CPI-U) for the period 
December 2006 through December 2007 will be 2.8 percent. Additionally, 
the Higher Education Reconciliation Act of 2005 (HERA, Pub. L. 109-171) 
modified the updating procedure for the income protection allowance for 
dependent students and the income protection allowance tables for both 
independent students with dependents other than a spouse and 
independent students without dependents other than a spouse. HERA 
established new 2007-08 award year values for these income protection 
allowances, which are being updated for the 2008-09 award year using 
the Secretary's estimated inflation rate of 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 education 
savings and asset protection allowances as provided for in section 
478(d) of the HEA. The Education Savings and Asset Protection Allowance 
table for award year 2008-2009 has been updated in section 3 of this 
notice. Section 478(h) of the HEA also requires the Secretary to 
increase the amount specified for the Employment Expense Allowance, 
adjusted for inflation. This calculation is based upon increases in the 
Bureau of Labor Statistics budget of the marginal costs for a two-
worker family compared to a one-worker family for food away from home, 
apparel, transportation, and household furnishings and operations. The 
Employment Expense Allowance table for award year 2008-2009 has been 
updated 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 $3,080. The income protection allowances for parents of dependent 
students for award year 2008-2009 are:

[[Page 30569]]



                                          Parents of Dependent Students
----------------------------------------------------------------------------------------------------------------
                                                                           Number in college
                     Family size                     -----------------------------------------------------------
                                                           1           2           3           4           5
----------------------------------------------------------------------------------------------------------------
2...................................................     $15,380     $12,750
3...................................................      19,150      16,540     $13,900
4...................................................      23,660      21,020      18,410     $15,770
5...................................................      27,910      25,280      22,660      20,030     $17,410
6...................................................      32,650      30,010      27,400      24,770      22,150
----------------------------------------------------------------------------------------------------------------

    For each additional family member add $3,680.
    For each additional college student subtract $2,620.
    The income protection allowances for independent students with 
dependents other than a spouse for award year 2008-2009 are:

                            Independent Students With Dependents Other Than a Spouse
----------------------------------------------------------------------------------------------------------------
                                                                           Number in college
                     Family size                     -----------------------------------------------------------
                                                           1           2           3           4           5
----------------------------------------------------------------------------------------------------------------
2...................................................     $15,750     $13,060  ..........  ..........  ..........
3...................................................      19,610      16,930     $14,240  ..........  ..........
4...................................................      24,220      21,530      18,850     $16,150  ..........
5...................................................      28,580      25,880      23,200      20,510     $17,830
6...................................................      33,420      30,730      28,060      25,350      22,680
----------------------------------------------------------------------------------------------------------------

    For each additional family member add $3,770.
    For each additional college student subtract $2,680.
    The income protection allowances for single independent students 
and independent students without dependents other than a spouse for 
award year 2008-2009 are:

------------------------------------------------------------------------
                                                   Number in
                 Marital status                     college       IPA
------------------------------------------------------------------------
Single..........................................           1      $6,220
Married.........................................           2       6,220
Married.........................................           1       9,970
------------------------------------------------------------------------

    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 because--(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 $110,000.........................  $0 + 40% of NW.
$110,001 to $330,000...................  $44,000 + 50% of NW over
                                          $110,000.
$330,001 to $550,000...................  $154,000 + 60% of NW over
                                          $330,000.
$550,001 or more.......................  $286,000 + 100% of NW over
                                          $550,000.
------------------------------------------------------------------------

    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.

[[Page 30570]]



                           Dependent Students
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                                                      And they are
                                               -------------------------
                                                Two parents   One parent
                                               -------------------------
If the age of the student is                       Then the education
                                                    savings and asset
                                                protection allowance is--
 
------------------------------------------------------------------------
25 or less....................................            0            0
26............................................        2,600        1,100
27............................................        5,100        2,100
28............................................        7,700        3,200
29............................................       10,200        4,300
30............................................       12,800        5,300
31............................................       15,400        6,400
32............................................       17,900        7,500
33............................................       20,500        8,500
34............................................       23,000        9,600
35............................................       25,600       10,700
36............................................       28,200       11,700
37............................................       30,700       12,800
38............................................       33,300       13,900
39............................................       35,800       14,900
40............................................       38,400       16,000
41............................................       39,300       16,400
42............................................       40,300       16,700
43............................................       41,300       17,100
44............................................       42,300       17,600
45............................................       43,400       17,900
46............................................       44,500       18,300
47............................................       45,600       18,800
48............................................       46,700       19,200
49............................................       47,900       19,700
50............................................       49,000       20,100
51............................................       50,500       20,500
52............................................       51,800       21,000
53............................................       53,300       21,500
54............................................       54,600       22,100
55............................................       56,300       22,600
56............................................       57,600       23,200
57............................................       59,300       23,700
58............................................       61,100       24,400
59............................................       62,900       25,000
60............................................       64,700       25,700
61............................................       66,600       26,300
62............................................       68,500       27,000
63............................................       70,800       27,800
64............................................       72,800       28,500
65 or older...................................       75,200       29,300
------------------------------------------------------------------------


       Independent Students Without Dependents Other Than a Spouse
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                                                      And they are
                                               -------------------------
                                                  Married       Single
                                               -------------------------
If the age of the student is                       Then the education
                                                    savings and asset
                                                protection allowance is--
 
------------------------------------------------------------------------
25 or less....................................            0            0
26............................................        2,600        1,100
27............................................        5,100        2,100
28............................................        7,700        3,200
29............................................       10,200        4,300
30............................................       12,800        5,300
31............................................       15,400        6,400
32............................................       17,900        7,500
33............................................       20,500        8,500
34............................................       23,000        9,600
35............................................       25,600       10,700
36............................................       28,200       11,700
37............................................       30,700       12,800
38............................................       33,300       13,900
39............................................       35,800       14,900
40............................................       38,400       16,000
41............................................       39,300       16,400
42............................................       40,300       16,700
43............................................       41,300       17,100
44............................................       42,300       17,600
45............................................       43,400       17,900
46............................................       44,500       18,300
47............................................       45,600       18,800
48............................................       46,700       19,200
49............................................       47,900       19,700
50............................................       49,000       20,100
51............................................       50,500       20,500
52............................................       51,800       21,000
53............................................       53,300       21,500
54............................................       54,600       22,100
55............................................       56,300       22,600
56............................................       57,600       23,200
57............................................       59,300       23,700
58............................................       61,100       24,400
59............................................       62,900       25,000
60............................................       64,700       25,700
61............................................       66,600       26,300
62............................................       68,500       27,000
63............................................       70,800       27,800
64............................................       72,800       28,500
65 or older...................................       75,200       29,300
------------------------------------------------------------------------


        Independent Students With Dependents Other Than a Spouse
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                                                      And they are
                                               -------------------------
                                                  Married       Single
                                               -------------------------
If the age of the student is                       Then the education
                                                    savings and asset
                                                protection allowance is--
 
------------------------------------------------------------------------
25 or less....................................            0            0
26............................................        2,600        1,100
27............................................        5,100        2,100
28............................................        7,700        3,200
29............................................       10,200        4,300
30............................................       12,800        5,300
31............................................       15,400        6,400
32............................................       17,900        7,500
33............................................       20,500        8,500
34............................................       23,000        9,600
35............................................       25,600       10,700
36............................................       28,200       11,700
37............................................       30,700       12,800
38............................................       33,300       13,900
39............................................       35,800       14,900
40............................................       38,400       16,000
41............................................       39,300       16,400
42............................................       40,300       16,700
43............................................       41,300       17,100
44............................................       42,300       17,600
45............................................       43,400       17,900
46............................................       44,500       18,300
47............................................       45,600       18,800
48............................................       46,700       19,200
49............................................       47,900       19,700
50............................................       49,000       20,100
51............................................       50,500       20,500
52............................................       51,800       21,000
53............................................       53,300       21,500
54............................................       54,600       22,100
55............................................       56,300       22,600
56............................................       57,600       23,200
57............................................       59,300       23,700
58............................................       61,100       24,400
59............................................       62,900       25,000
60............................................       64,700       25,700
61............................................       66,600       26,300
62............................................       68,500       27,000
63............................................       70,800       27,800
64............................................       72,800       28,500
65 or older...................................       75,200       29,300
------------------------------------------------------------------------

    4. Assessment Schedules and Rates. Two schedules that are subject 
to updates, one for parents of dependent students and one for 
independent students with dependents other than a spouse, are used to 
determine the EFC toward educational expenses from family financial 
resources. For dependent students, the EFC is derived from an 
assessment of the parents' adjusted available income (AAI). For 
independent students with dependents other than a spouse, the EFC 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......................  -$750.
($3,409) to $13,700....................  22% of AAI.
$13,701 to $17,300.....................  $3,014 + 25% of AAI over
                                          $13,700.
$17,301 to $20,800.....................  $3,914 + 29% of AAI over
                                          $17,300.
$20,801 to $24,300.....................  $4,929 + 34% of AAI over
                                          $20,800.
$24,301 to $27,800.....................  $6,119 + 40% of AAI over
                                          $24,300.

[[Page 30571]]

 
$27,801 or more........................  $7,519 + 47% of AAI over
                                          $27,800.
------------------------------------------------------------------------

    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......................  -$750.
($3,409) to $13,700....................  22% of AAI.
$13,701 to $17,300.....................  $3,014 + 25% of AAI over
                                          $13,700.
$17,301 to $20,800.....................  $3,914 + 29% of AAI over
                                          $17,300.
$20,801 to $24,300.....................  $4,929 + 34% of AAI over
                                          $20,800.
$24,301 to $27,800.....................  $6,119 + 40% of AAI over
                                          $24,300.
$27,801 or more........................  $7,519 + 47% of AAI over
                                          $27,800.
------------------------------------------------------------------------

    5. Employment Expense Allowance. This allowance for employment-
related expenses, which is used for the parents of dependent students 
and for married independent students, recognizes additional expenses 
incurred by working spouses and single-parent households. The allowance 
is based upon the marginal differences in costs for a two-worker family 
compared to a one-worker family for food away from home, apparel, 
transportation, and household furnishings and operations.
    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 $3,300 or 35 percent of earned income.
    6. Allowance for State and Other Taxes. The allowance for State and 
other taxes protects a portion of the parents' and students' income 
from being considered available for postsecondary educational expenses. 
There are four categories 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. Section 478(g) of the HEA 
directs the Secretary to update the tables for State and other taxes 
after reviewing the Statistics of Income file data maintained by the 
Internal Revenue Service.

----------------------------------------------------------------------------------------------------------------
                                                               Parents of dependents and         Dependents and
                                                          independents with dependents other      independents
                                                                     than a spouse                  without
                         State                          --------------------------------------  dependents other
                                                                                                 than a spouse
                                                           Under $15,000       $15,000 & up   ------------------
                                                             (percent)          (percent)        All  (percent)
----------------------------------------------------------------------------------------------------------------
Alabama................................................                  3                  2                  2
Alaska.................................................                  2                  1                  0
Arizona................................................                  4                  3                  3
Arkansas...............................................                  4                  3                  3
California.............................................                  7                  6                  5
Colorado...............................................                  4                  3                  3
Connecticut............................................                  7                  6                  4
Delaware...............................................                  4                  3                  3
District of Columbia...................................                  7                  6                  6
Florida................................................                  3                  2                  1
Georgia................................................                  6                  5                  3
Hawaii.................................................                  4                  3                  4
Idaho..................................................                  5                  4                  3
Illinois...............................................                  5                  4                  2
Indiana................................................                  4                  3                  3
Iowa...................................................                  5                  4                  3
Kansas.................................................                  5                  4                  3
Kentucky...............................................                  5                  4                  4
Louisiana..............................................                  3                  2                  2
Maine..................................................                  6                  5                  4
Maryland...............................................                  7                  6                  5
Massachusetts..........................................                  6                  5                  4
Michigan...............................................                  5                  4                  3
Minnesota..............................................                  6                  5                  4
Mississippi............................................                  4                  3                  2
Missouri...............................................                  5                  4                  3
Montana................................................                  5                  4                  3
Nebraska...............................................                  5                  4                  3
Nevada.................................................                  3                  2                  1
New Hampshire..........................................                  5                  4                  1
New Jersey.............................................                  8                  7                  4
New Mexico.............................................                  4                  3                  3

[[Page 30572]]

 
New York...............................................                  9                  8                  6
North Carolina.........................................                  6                  5                  4
North Dakota...........................................                  2                  1                  1
Ohio...................................................                  6                  5                  4
Oklahoma...............................................                  6                  5                  3
Oregon.................................................                  7                  6                  5
Pennsylvania...........................................                  5                  4                  3
Rhode Island...........................................                  7                  6                  4
South Carolina.........................................                  5                  4                  3
South Dakota...........................................                  2                  1                  1
Tennessee..............................................                  2                  1                  1
Texas..................................................                  3                  2                  1
Utah...................................................                  5                  4                  4
Vermont................................................                  5                  4                  3
Virginia...............................................                  5                  4                  3
Washington.............................................                  4                  3                  2
West Virginia..........................................                  3                  2                  2
Wisconsin..............................................                  7                  6                  4
Wyoming................................................                  2                  1                  1
Other..................................................                  3                  2                  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; 
84.268 William D. Ford Federal Direct Loan Program; 84.375 Academic 
Competitiveness Grant; 84.376 National Science and Mathematics 
Access to Retain Talent Grant)

    Dated: May 29, 2007.
Theresa S. Shaw,
Chief Operating Officer, Federal Student Aid.
[FR Doc. E7-10621 Filed 5-31-07; 8:45 am]
BILLING CODE 4000-01-P