[Federal Register Volume 75, Number 102 (Thursday, May 27, 2010)]
[Notices]
[Pages 29744-29749]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-12799]


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DEPARTMENT OF EDUCATION


Federal Pell Grant, Federal Perkins Loan, Federal Work-Study, 
Federal Supplemental Educational Opportunity Grant, William D. Ford 
Federal Direct Loan, and TEACH Grant Programs

AGENCY: Federal Student Aid, U.S. Department of Education.

ACTION: Notice of revision of the Federal Need Analysis Methodology for 
the 2011-2012 award year.

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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 
2011-2012 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, Federal Perkins Loan, Federal 
Work-Study, Federal Supplemental Educational Opportunity Grant, William 
D. Ford Federal Direct Loan, and the Teach Grant Programs (Title IV, 
HEA Programs).

FOR FURTHER INFORMATION CONTACT: Ms. Marya Dennis, Management and 
Program Analyst, U.S. Department of Education, room 63G2, Union Center 
Plaza, 830 First Street, NE., Washington, DC 20202-5454. 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 
accessible 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 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 for general price inflation. The changes are based, in 
general, upon increases in the Consumer Price Index.
    For award year 2011-2012, 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 
2009 and December 2010. However, because the Secretary must publish 
these tables before December 2010, 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 (CPI-U) for 2010. The 
Secretary must also account for any misestimation of inflation for the 
prior year. In developing the table values for the 2010-2011 award 
year, the Secretary assumed a 4.1 percent increase in the CPI-U for the 
period December 2008 through December 2009. Actual inflation for this 
time period was 2.7 percent. The Secretary estimates that the increase 
in the CPI-U for the period December 2009 through December 2010 will be 
1.2 percent. Last year's overestimate of inflation for 2009 (4.1 
percent minus 2.7 percent) exceeds this year's estimate of inflation 
for 2010. However, the Secretary lacks statutory authority to reduce 
the table values in the need analysis formula. Thus, the income 
protection allowance for parents of dependent students, the adjusted 
net worth of a business or farm, and the assessment schedules and rates 
are unchanged from 2010-2011. Additionally, section 601 of the College 
Cost Reduction and Access Act of 2007 (CCRAA, Pub. L. 110-84) amended 
sections 475 through 478 of the HEA by updating the procedures for 
determining the income protection allowance for dependent students as 
well as the income protection allowance tables for both independent 
students with dependents other than a spouse and

[[Page 29745]]

independent students without dependents other than a spouse. As amended 
by the CCRAA, the HEA established new 2011-2012 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 2011-2012 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 2011-2012 has been 
updated in section 5 of this notice.
    The HEA provides for the following annual updates:
    1. Income Protection Allowance (IPA). 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 IPA for the dependent student is $5,250. The IPAs for 
parents of dependent students for award year 2011-2012 are:

                                                              Parents of Dependent Students
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Number in college
---------------------------------------------------------------------------------------------------------------------------------------------------------
                          Family size                                   1                 2                 3                 4                 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
2.............................................................           $16,230           $13,450  ................  ................  ................
3.............................................................            20,210            17,450           $14,670  ................  ................
4.............................................................            24,970            22,190            19,430           $16,650  ................
5.............................................................            29,460            26,680            23,920            21,140           $18,380
6.............................................................            34,460            31,680            28,920            26,140            23,380
--------------------------------------------------------------------------------------------------------------------------------------------------------

    For each additional family member add $3,890.
    For each additional college student subtract $2,760.
    The IPAs for independent students with dependents other than a 
spouse for award year 2011-12 are:

                                                Independent Students With Dependents Other Than a Spouse
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Number in college
---------------------------------------------------------------------------------------------------------------------------------------------------------
                          Family size                                   1                 2                 3                 4                 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
2.............................................................           $21,660           $17,960  ................  ................  ................
3.............................................................            26,960            23,280           $19,580  ................  ................
4.............................................................            33,300            29,600            25,920           $22,210  ................
5.............................................................            39,300            35,590            31,900            28,200           $24,520
6.............................................................            45,950            42,250            38,580            34,860            31,190
--------------------------------------------------------------------------------------------------------------------------------------------------------

    For each additional family member add $5,180.
    For each additional college student subtract $3,690.
    The IPAs for single independent students and independent students 
without dependents other than a spouse for award year 2011-12 are:

------------------------------------------------------------------------
                                                 Number in
                Marital status                    college        IPA
------------------------------------------------------------------------
Single........................................            1       $8,550
Married.......................................            2        8,550
Married.......................................            1       13,710
------------------------------------------------------------------------

    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 (NW) is--
----------------------------------------------------------------------------------------------------------------
Less than $1................................  $0.
$1 to $115,000..............................  $0 + 40% of NW.
$115,001 to $345,000........................  $46,000 + 50% of NW over $115,000.
$345,001 to $580,000........................  $161,000 + 60% of NW over $345,000.
$580,001 or more............................  $302,000 + 100% of NW over $580,000.
----------------------------------------------------------------------------------------------------------------

    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 29746]]



                                               Dependent Students
----------------------------------------------------------------------------------------------------------------
                                                                             And they are
                                                     -----------------------------------------------------------
                                                                 Married                       Single
----------------------------------------------------------------------------------------------------------------
If the age of the older parent is                      Then the education savings and asset protection allowance
                                                                                 is--
----------------------------------------------------------------------------------------------------------------
25 or less..........................................                             0                             0
26..................................................                         2,500                           900
27..................................................                         5,100                         1,800
28..................................................                         7,600                         2,700
29..................................................                        10,200                         3,500
30..................................................                        12,700                         4,400
31..................................................                        15,300                         5,300
32..................................................                        17,800                         6,200
33..................................................                        20,400                         7,100
34..................................................                        22,900                         8,000
35..................................................                        25,500                         8,900
36..................................................                        28,000                         9,800
37..................................................                        30,600                        10,600
38..................................................                        33,100                        11,500
39..................................................                        35,700                        12,400
40..................................................                        38,200                        13,300
41..................................................                        38,900                        13,600
42..................................................                        39,900                        13,900
43..................................................                        40,900                        14,200
44..................................................                        41,900                        14,500
45..................................................                        42,900                        14,900
46..................................................                        44,000                        15,200
47..................................................                        45,100                        15,500
48..................................................                        46,200                        15,900
49..................................................                        47,400                        16,300
50..................................................                        48,800                        16,700
51..................................................                        50,000                        17,100
52..................................................                        51,200                        17,500
53..................................................                        52,800                        18,000
54..................................................                        54,300                        18,400
55..................................................                        55,600                        18,800
56..................................................                        57,300                        19,300
57..................................................                        58,700                        19,800
58..................................................                        60,400                        20,300
59..................................................                        62,200                        20,800
60..................................................                        64,000                        21,400
61..................................................                        65,800                        22,000
62..................................................                        67,700                        22,600
63..................................................                        70,000                        23,200
64..................................................                        72,000                        23,800
65 or older.........................................                        74,000                        24,500
----------------------------------------------------------------------------------------------------------------


                           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..................................................                         2,500                           900
27..................................................                         5,100                         1,800
28..................................................                         7,600                         2,700
29..................................................                        10,200                         3,500
30..................................................                        12,700                         4,400
31..................................................                        15,300                         5,300
32..................................................                        17,800                         6,200
33..................................................                        20,400                         7,100
34..................................................                        22,900                         8,000
35..................................................                        25,500                         8,900
36..................................................                        28,000                         9,800
37..................................................                        30,600                        10,600
38..................................................                        33,100                        11,500
39..................................................                        35,700                        12,400
40..................................................                        38,200                        13,300
41..................................................                        38,900                        13,600
42..................................................                        39,900                        13,900

[[Page 29747]]

 
43..................................................                        40,900                        14,200
44..................................................                        41,900                        14,500
45..................................................                        42,900                        14,900
46..................................................                        44,000                        15,200
47..................................................                        45,100                        15,500
48..................................................                        46,200                        15,900
49..................................................                        47,400                        16,300
50..................................................                        48,800                        16,700
51..................................................                        50,000                        17,100
52..................................................                        51,200                        17,500
53..................................................                        52,800                        18,000
54..................................................                        54,300                        18,400
55..................................................                        55,600                        18,800
56..................................................                        57,300                        19,300
57..................................................                        58,700                        19,800
58..................................................                        60,400                        20,300
59..................................................                        62,200                        20,800
60..................................................                        64,000                        21,400
61..................................................                        65,800                        22,000
62..................................................                        67,700                        22,600
63..................................................                        70,000                        23,200
64..................................................                        72,000                        23,800
65 or older.........................................                        74,000                        24,500
----------------------------------------------------------------------------------------------------------------


                            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..................................................                         2,500                           900
27..................................................                         5,100                         1,800
28..................................................                         7,600                         2,700
29..................................................                        10,200                         3,500
30..................................................                        12,700                         4,400
31..................................................                        15,300                         5,300
32..................................................                        17,800                         6,200
33..................................................                        20,400                         7,100
34..................................................                        22,900                         8,000
35..................................................                        25,500                         8,900
36..................................................                        28,000                         9,800
37..................................................                        30,600                        10,600
38..................................................                        33,100                        11,500
39..................................................                        35,700                        12,400
40..................................................                        38,200                        13,300
41..................................................                        38,900                        13,600
42..................................................                        39,900                        13,900
43..................................................                        40,900                        14,200
44..................................................                        41,900                        14,500
45..................................................                        42,900                        14,900
46..................................................                        44,000                        15,200
47..................................................                        45,100                        15,500
48..................................................                        46,200                        15,900
49..................................................                        47,400                        16,300
50..................................................                        48,800                        16,700
51..................................................                        50,000                        17,100
52..................................................                        51,200                        17,500
53..................................................                        52,800                        18,000
54..................................................                        54,300                        18,400
55..................................................                        55,600                        18,800
56..................................................                        57,300                        19,300
57..................................................                        58,700                        19,800
58..................................................                        60,400                        20,300
59..................................................                        62,200                        20,800

[[Page 29748]]

 
60..................................................                        64,000                        21,400
61..................................................                        65,800                        22,000
62..................................................                        67,700                        22,600
63..................................................                        70,000                        23,200
64..................................................                        72,000                        23,800
65 or older.........................................                        74,000                        24,500
----------------------------------------------------------------------------------------------------------------

    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 $14,500.........................  22% of AAI.
$14,501 to $18,200..........................  $3,190 + 25% of AAI over $14,500.
$18,201 to $21,900..........................  $4,115 + 29% of AAI over $18,200.
$21,901 to $25,600..........................  $5,188 + 34% of AAI over $21,900.
$25,601 to $29,300..........................  $6,446 + 40% of AAI over $25,600.
$29,301 or more.............................  $7,926 + 47% of AAI over $29,300.
----------------------------------------------------------------------------------------------------------------

    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...........................  -$750.
($3,409) to $14,500.........................  22% of AAI.
$14,501 to $18,200..........................  $3,190 + 25% of AAI over $14,500.
$18,201 to $21,900..........................  $4,115 + 29% of AAI over $18,200.
$21,901 to $25,600..........................  $5,188 + 34% of AAI over $21,900.
$25,601 to $29,300..........................  $6,446 + 40% of AAI over $25,600.
$29,301 or more.............................  $7,926 + 47% of AAI over $29,300.
----------------------------------------------------------------------------------------------------------------

    5. Employment Expense Allowance. This allowance for employment-
related expenses, which is used for the parents of dependent students 
and for married independent students, 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 independents with         Dependents and
                                                dependents other than a spouse             independents without
                                      -------------------------------------------------- dependents other than a
                State                                                                             spouse
                                          Under $15,000 (in         $15,000 & Up (in    ------------------------
                                               percent)                 percent)             All (in percent)
----------------------------------------------------------------------------------------------------------------
Alabama..............................                        3                        2                        2

[[Page 29749]]

 
Alaska...............................                        2                        1                        0
Arizona..............................                        5                        4                        3
Arkansas.............................                        4                        3                        3
California...........................                        8                        7                        5
Colorado.............................                        5                        4                        3
Connecticut..........................                        7                        6                        4
Delaware.............................                        5                        4                        3
District of Columbia.................                        7                        6                        6
Florida..............................                        4                        3                        1
Georgia..............................                        6                        5                        4
Hawaii...............................                        4                        3                        4
Idaho................................                        5                        4                        4
Illinois.............................                        6                        5                        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                        6
Massachusetts........................                        6                        5                        4
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...............................                        4                        3                        1
New Hampshire........................                        5                        4                        1
New Jersey...........................                       10                        9                        5
New Mexico...........................                        3                        2                        2
New York.............................                        9                        8                        6
North Carolina.......................                        6                        5                        4
North Dakota.........................                        3                        2                        1
Ohio.................................                        6                        5                        4
Oklahoma.............................                        4                        3                        3
Oregon...............................                        8                        7                        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..............................                        6                        5                        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
----------------------------------------------------------------------------------------------------------------

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well as all other documents of this Department published in the Federal 
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    Note:  The official version of this document is the document 
published in the Federal Register. Free Internet access to the 
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Regulations is available on GPO Access at: http://www.gpoaccess.gov/nara/index.html.

(Catalog of Federal Domestic Assistance Numbers: 84.063 Federal Pell 
Grant Program; 84.038 Federal Perkins Loan Program; 84.033 Federal 
Work-Study Programs; 84.007 Federal Supplemental Educational 
Opportunity Grant Program; 84.268 William D. Ford Federal Direct 
Loan Program; 84.379 TEACH Grant Program)

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

    Dated: May 24, 2010.
William J. Taggart,
Chief Operating Officer, Federal Student Aid.
[FR Doc. 2010-12799 Filed 5-26-10; 8:45 am]
BILLING CODE 4000-01-P