[Federal Register Volume 73, Number 104 (Thursday, May 29, 2008)]
[Notices]
[Pages 30904-30908]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-11953]


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

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 2009-2010 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 
2009-2010 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), call the 
Federal Relay Service (FRS), toll free at 1-800-877-8339.
    Individuals with disabilities can obtain this document in an 
alternative format (e.g., Braille, large print, audiotape or compact 
disk) 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 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 adjust for general price inflation. The changes are 
based, in general, upon increases in the Consumer Price Index.
    For award year 2009-2010 the Secretary is charged with updating the 
income protection allowance for parents of dependent students, adjusted 
net worth of a business or farm, and the assessment schedules and rates 
to account for inflation that took place between December 2007 and 
December

[[Page 30905]]

2008. However, because the Secretary must publish these tables before 
December 2008, 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 2008. The Secretary estimates 
that the increase in the Consumer Price Index for All Urban Consumers 
(CPI-U) for the period December 2007 through December 2008 will be 1.7 
percent. Additionally, the College Cost Reduction and Access Act 
(CCRAA, Pub. L. 110-84) 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. CCRAA established new 2009-2010 award year values for these 
income protection allowances. 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 2009-2010 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 2009-2010 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 $3,750. The income protection allowances for parents of dependent 
students for award year 2009-2010 are:

----------------------------------------------------------------------------------------------------------------
                                                                     Parents of dependent students
                                                     -----------------------------------------------------------
                     Family size                                           Number in college
                                                     -----------------------------------------------------------
                                                           1           2           3           4           5
----------------------------------------------------------------------------------------------------------------
2...................................................     $15,840     $13,130  ..........  ..........  ..........
3...................................................      19,730      17,030     $14,320  ..........  ..........
4...................................................      24,370      21,660      18,960     $16,250
5...................................................      28,750      26,040      23,340      20,630     $17,940
6...................................................      33,630      30,920      28,220      25,510      22,820
----------------------------------------------------------------------------------------------------------------

    For each additional family member, add $3,800.
    For each additional college student, subtract $2,700.
    The income protection allowances for independent students with 
dependents other than a spouse for award year 2009-10 are:

----------------------------------------------------------------------------------------------------------------
                                                       Independent students with dependents other than a spouse
                                                     -----------------------------------------------------------
                     Family size                                           Number in college
                                                     -----------------------------------------------------------
                                                           1           2           3           4           5
----------------------------------------------------------------------------------------------------------------
2...................................................     $17,720     $14,690  ..........  ..........  ..........
3...................................................      22,060      19,050     $16,020  ..........  ..........
4...................................................      27,250      24,220      21,210     $18,170  ..........
5...................................................      32,150      29,120      26,100      23,070     $20,060
6...................................................      37,600      34,570      31,570      28,520      25,520
----------------------------------------------------------------------------------------------------------------

    For each additional family member, add $4,240.
    For each additional college student, subtract $3,020.
    The income protection allowances for single independent students 
and independent students without dependents other than a spouse for 
award year 2009-10 are:

------------------------------------------------------------------------
                                                   Number in
                 Marital status                     college       IPA
------------------------------------------------------------------------
Single..........................................            1     $7,000
Married.........................................            2      7,000
Married.........................................            1     11,220
------------------------------------------------------------------------

    2. Adjusted Net Worth (NW) of a Business or Farm. A portion of the 
full net value of a business or farm 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 is--                    Then the adjusted net worth is--
----------------------------------------------------------------------------------------------------------------
Less than $1.................................  $0
$1 to $115,000...............................  $0 + 40% of NW
$115,001 to $340,000.........................  $46,000 + 50% of NW over $115,000
$340,001 to $565,000.........................  $158,500 + 60% of NW over $340,000

[[Page 30906]]

 
$565,001 or more.............................  $293,500 + 100% of NW over $565,000
----------------------------------------------------------------------------------------------------------------

    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 they are
         If the age of the older parent is         ---------------------
                                                     Married     Single
------------------------------------------------------------------------
                                                     Then the education
                                                      savings and asset
                                                    protection allowance
                                                            is--
------------------------------------------------------------------------
25 or less........................................          0          0
26................................................      2,900      1,200
27................................................      5,800      2,400
28................................................      8,700      3,600
29................................................     11,600      4,800
30................................................     14,500      6,000
31................................................     17,400      7,200
32................................................     20,300      8,400
33................................................     23,100      9,500
34................................................     26,000     10,700
35................................................     28,900     11,900
36................................................     31,800     13,100
37................................................     34,700     14,300
38................................................     37,600     15,500
39................................................     40,500     16,700
40................................................     43,400     17,900
41................................................     44,200     18,200
42................................................     45,300     18,600
43................................................     46,400     19,100
44................................................     47,600     19,500
45................................................     48,700     19,900
46................................................     49,900     20,400
47................................................     51,200     20,900
48................................................     52,400     21,400
49................................................     53,700     21,900
50................................................     55,300     22,400
51................................................     56,700     22,900
52................................................     58,000     23,500
53................................................     59,800     24,000
54................................................     61,200     24,600
55................................................     63,000     25,300
56................................................     64,900     25,900
57................................................     66,400     26,500
58................................................     68,300     27,200
59................................................     70,300     27,900
60................................................     72,300     28,700
61................................................     74,400     29,500
62................................................     76,600     30,300
63................................................     79,100     31,100
64................................................     81,300     32,000
65 or older.......................................     84,000     32,800
------------------------------------------------------------------------


       Independent Students Without Dependents Other Than a Spouse
------------------------------------------------------------------------
                                                        And they are
           If the age of the  student is           ---------------------
                                                     Married     Single
------------------------------------------------------------------------
                                                     Then the education
                                                      savings and asset
                                                    protection allowance
                                                            is--
------------------------------------------------------------------------
25 or less........................................          0          0
26................................................      2,900      1,200
27................................................      5,800      2,400
28................................................      8,700      3,600
29................................................     11,600      4,800
30................................................     14,500      6,000
31................................................     17,400      7,200
32................................................     20,300      8,400
33................................................     23,100      9,500
34................................................     26,000     10,700
35................................................     28,900     11,900
36................................................     31,800     13,100
37................................................     34,700     14,300
38................................................     37,600     15,500
39................................................     40,500     16,700
40................................................     43,400     17,900
41................................................     44,200     18,200
42................................................     45,300     18,600
43................................................     46,400     19,100
44................................................     47,600     19,500
45................................................     48,700     19,900
46................................................     49,900     20,400
47................................................     51,200     20,900
48................................................     52,400     21,400
49................................................     53,700     21,900
50................................................     55,300     22,400
51................................................     56,700     22,900
52................................................     58,000     23,500
53................................................     59,800     24,000
54................................................     61,200     24,600
55................................................     63,000     25,300
56................................................     64,900     25,900
57................................................     66,400     26,500
58................................................     68,300     27,200
59................................................     70,300     27,900
60................................................     72,300     28,700
61................................................     74,400     29,500
62................................................     76,600     30,300
63................................................     79,100     31,100
64................................................     81,300     32,000
65 or older.......................................     84,000     32,800
------------------------------------------------------------------------


        Independent Students With Dependents Other Than a Spouse
------------------------------------------------------------------------
                                                        And they are
           If the age of the  student is           ---------------------
                                                     Married     Single
------------------------------------------------------------------------
                                                     Then the education
                                                      savings and asset
                                                    protection allowance
                                                            is--
------------------------------------------------------------------------
25 or less........................................          0          0
26................................................      2,900      1,200
27................................................      5,800      2,400
28................................................      8,700      3,600
29................................................     11,600      4,800
30................................................     14,500      6,000
31................................................     17,400      7,200
32................................................     20,300      8,400
33................................................     23,100      9,500
34................................................     26,000     10,700
35................................................     28,900     11,900
36................................................     31,800     13,100
37................................................     34,700     14,300
38................................................     37,600     15,500
39................................................     40,500     16,700
40................................................     43,400     17,900
41................................................     44,200     18,200
42................................................     45,300     18,600
43................................................     46,400     19,100
44................................................     47,600     19,500
45................................................     48,700     19,900
46................................................     49,900     20,400
47................................................     51,200     20,900
48................................................     52,400     21,400
49................................................     53,700     21,900
50................................................     55,300     22,400
51................................................     56,700     22,900
52................................................     58,000     23,500
53................................................     59,800     24,000
54................................................     61,200     24,600
55................................................     63,000     25,300
56................................................     64,900     25,900
57................................................     66,400     26,500
58................................................     68,300     27,200
59................................................     70,300     27,900
60................................................     72,300     28,700
61................................................     74,400     29,500
62................................................     76,600     30,300
63................................................     79,100     31,100
64................................................     81,300     32,000
65 or older.......................................     84,000     32,800
------------------------------------------------------------------------




    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.

[[Page 30907]]

    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 $14,200.........  22% of AAI
$14,201 to $17,800..........  $3,124 + 25% of AAI over $14,200
$17,801 to $21,400..........  $4,024 + 29% of AAI over $17,800
$21,401 to $25,000..........  $5,068 + 34% of AAI over $21,400
$25,001 to $28,600..........  $6,292 + 40% of AAI over $25,000
$28,601 or more.............  $7,732 + 47% of AAI over $28,600
------------------------------------------------------------------------

    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 $14,200.........  22% of AAI
$14,201 to $17,800..........  $3,124 + 25% of AAI over $14,200
$17,801 to $21,400..........  $4,024 + 29% of AAI over $17,800
$21,401 to $25,000..........  $5,068 + 34% of AAI over $21,400
$25,001 to $28,600..........  $6,292 + 40% of AAI over $25,000
$28,601 or more.............  $7,732 + 47% of AAI over $28,600
------------------------------------------------------------------------

    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 $3,500 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 (%) -----------------
                                                                   (%)                               All (%)
----------------------------------------------------------------------------------------------------------------
Alabama...................................................                3                 2                 2
Alaska....................................................                2                 1                 0
Arizona...................................................                4                 3                 3
Arkansas..................................................                4                 3                 3
California................................................                8                 7                 5
Colorado..................................................                5                 4                 3
Connecticut...............................................                8                 7                 4
Delaware..................................................                4                 3                 3
District of Columbia......................................                7                 6                 6
Florida...................................................                3                 2                 1
Georgia...................................................                5                 4                 4
Hawaii....................................................                5                 4                 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..................................................                8                 7                 5
Massachusetts.............................................                7                 6                 4

[[Page 30908]]

 
Michigan..................................................                5                 4                 3
Minnesota.................................................                6                 5                 4
Mississippi...............................................                3                 2                 2
Missouri..................................................                5                 4                 3
Montana...................................................                5                 4                 3
Nebraska..................................................                5                 4                 3
Nevada....................................................                3                 2                 1
New Hampshire.............................................                5                 4                 1
New Jersey................................................                9                 8                 4
New Mexico................................................                3                 2                 3
New York..................................................                9                 8                 6
North Carolina............................................                6                 5                 4
North Dakota..............................................                3                 2                 1
Ohio......................................................                6                 5                 4
Oklahoma..................................................                4                 3                 3
Oregon....................................................                7                 6                 5
Pennsylvania..............................................                6                 5                 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..................................................                6                 5                 4
Washington................................................                4                 3                 1
West Virginia.............................................                3                 2                 2
Wisconsin.................................................                7                 6                 4
Wyoming...................................................                2                 1                 1
Other.....................................................                3                 2                 2
----------------------------------------------------------------------------------------------------------------

    You may view this document, as well as all other documents of this 
Department published in the Federal Register, in text or Adobe Portable 
Document Format (PDF) on the Internet at the following site: http://www.ed.gov/news/fedregister.
    To use PDF you must have Adobe Acrobat Reader, which is available 
free at this site. If you have questions about using PDF, call the U.S. 
Government Printing Office (GPO), toll free, at 1-888-293-6498; or in 
the 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.gpoaccess.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; 
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)

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

    Dated: May 22, 2008.
Lawrence A. Warder,
Acting Chief Operating Officer, Federal Student Aid.
[FR Doc. E8-11953 Filed 5-28-08; 8:45 am]
BILLING CODE 4000-01-P