[Federal Register Volume 81, Number 152 (Monday, August 8, 2016)]
[Notices]
[Pages 52418-52424]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-18723]
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DEPARTMENT OF EDUCATION
Federal Need Analysis Methodology for the 2017-18 Award Year--
Federal Pell Grant, Federal Perkins Loan, Federal Work-Study, Federal
Supplemental Educational Opportunity Grant, William D. Ford Federal
Direct Loan, Iraq and Afghanistan Service Grant and TEACH Grant
Programs
AGENCY: Federal Student Aid, Department of Education.
ACTION: Notice; republication.
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Catalog of Federal Domestic Assistance (CFDA) Numbers: 84.063;
84.038; 84.033; 84.007; 84.268; 84.408; 84.379.
SUMMARY: This notice is a republication of a May 24, 2016 notice (81 FR
32737) to include information that was missing from the original
version. The only change to this version is in the ``Education Savings
and Asset Protection Allowance'' table under the ``Parents of Dependent
Students'' section, where the first row of information was missing from
the original notice. No other information has changed.
The Secretary announces the annual updates to the tables used in
the statutory Federal Need Analysis Methodology that determines a
student's expected family contribution (EFC) for award year 2017-18 for
these student financial aid programs. The intent of this notice is to
alert the financial aid community and the broader public to these
required annual updates used in the determination of student aid
eligibility.
FOR FURTHER INFORMATION CONTACT: Marya Dennis, 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) or a text
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.
[[Page 52419]]
SUPPLEMENTARY INFORMATION: Part F of title IV of the Higher Education
Act of 1965, as amended (HEA), specifies the criteria, data elements,
calculations, and tables the Department of Education (Department) uses
in the Federal Need Analysis Methodology to determine the EFC.
Section 478 of the HEA requires the Secretary to annually update
the following four tables for price inflation--the Income Protection
Allowance (IPA), the Adjusted Net Worth (NW) of a Business or Farm, the
Education Savings and Asset Protection Allowance, and the Assessment
Schedules and Rates. The updates are based, in general, upon increases
in the Consumer Price Index (CPI).
For award year 2017-18, the Secretary is charged with updating the
IPA for parents of dependent students, adjusted NW of a business or
farm, the education savings and asset protection allowance, and the
assessment schedules and rates to account for inflation that took place
between December 2015 and December 2016. However, because the Secretary
must publish these tables before December 2016, the increases in the
tables must be based on a percentage equal to the estimated percentage
increase in the Consumer Price Index for All Urban Consumers (CPI-U)
for 2016. The Secretary must also account for any under- or over-
estimation of inflation for the preceding year.
In developing the table values for the 2016-17 award year, the
Secretary assumed a 2.5 percent increase in the CPI-U for the period
December 2014 through December 2015. Actual inflation for this time
period was .7 percent. The Secretary estimates that the increase in the
CPI-U for the period December 2015 through December 2016 will be 2.1
percent.
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 affecting the IPA tables for the 2009-10 through 2012-13 award
years and required the Department to use a percentage of the estimated
CPI to update the table in subsequent years. These changes to the IPA
impact dependent students, as well as independent students with
dependents other than a spouse and independent students without
dependents other than a spouse. This notice includes the new 2017-18
award year values for the IPA tables, which reflect the CCRAA
amendments. The updated tables are in sections 1 (Income Protection
Allowance), 2 (Adjusted Net Worth of a Business or Farm), and 4
(Assessment Schedules and Rates) of this notice.
As provided for in section 478(d) of the HEA, the Secretary must
also revise the education savings and asset protection allowances for
each award year. The Education Savings and Asset Protection Allowance
table for award year 2017-18 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 on increases in the Bureau of
Labor Statistics' marginal costs budget for a two-worker family
compared to a one-worker family. The items covered by this calculation
are: Food away from home, apparel, transportation, and household
furnishings and operations. The Employment Expense Allowance table for
award year 2017-18 has been updated in section 5 of this notice.
The HEA requires 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. The allowance
varies by family size. The IPA for the dependent student is $6,420. The
IPAs for parents of dependent students for award year 2017-18 are as
follows:
Parents of Dependent Students
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Number in college
Family size -------------------------------------------------------------------------------
1 2 3 4 5
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2............................... $17,910 $14,840
3............................... 22,300 19,250 $16,190
4............................... 27,540 24,480 21,430 $18,360
5............................... 32,490 29,430 26,380 23,320 $20,270
6............................... 38,010 34,940 31,900 28,830 25,790
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For each additional family member add $4,290. For each additional
college student subtract $3,050.
The IPAs for independent students with dependents other than a
spouse for award year 2017-18 are as follows:
Independent Students With Dependents Other Than a Spouse
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Number in college
Family size -------------------------------------------------------------------------------
1 2 3 4 5
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2............................... $25,280 $20,960
3............................... 31,480 27,180 $22,860
4............................... 38,870 34,560 30,260 $25,930
5............................... 45,870 41,540 37,240 32,920 $28,620
6............................... 53,640 49,330 45,040 40,690 36,400
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For each additional family member add $6,060. For each additional
college student subtract $4,300.
The IPAs for single independent students and independent students
without dependents other than a spouse for award year 2017-18 are as
follows:
[[Page 52420]]
------------------------------------------------------------------------
Number in
Marital status college IPA
Single.................................. 1 $9,980
Married................................. 2 9,980
Married................................. 1 16,010
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2. Adjusted Net Worth of a Business or Farm. A portion of the full
NW (assets less debts) 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.
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If the NW of a business or farm is Then the adjusted NW is
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Less than $1............................... $0
$1 to $130,000............................. $0 + 40% of NW.
$130,001 to $385,000....................... $52,000 + 50% of NW over $130,000.
$385,001 to $640,000....................... $179,500 + 60% of NW over $385,000.
$640,001 or more........................... $332,500 + 100% of NW over $640,000.
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3. Education Savings and Asset Protection Allowance. This allowance
protects a portion of NW (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.
Parents of Dependent Students
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And they are
If the age of the older parent is -------------------------------
Married Single
-Then the education savings and
asset protection allowance is
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25 or less.............................. 0 0
26...................................... 1,100 600
27...................................... 2,200 1,300
28...................................... 3,400 1,900
29...................................... 4,500 2,600
30...................................... 5,600 3,200
31...................................... 6,700 3,800
32...................................... 7,800 4,500
33...................................... 9,000 5,100
34...................................... 10,100 5,800
35...................................... 11,200 6,400
36...................................... 12,300 7,000
37...................................... 13,400 7,700
38...................................... 14,600 8,300
39...................................... 15,700 9,000
40...................................... 16,800 9,600
41...................................... 17,100 9,800
42...................................... 17,500 10,000
43...................................... 17,900 10,200
44...................................... 18,400 10,500
45...................................... 18,800 10,700
46...................................... 19,300 10,900
47...................................... 19,800 11,200
48...................................... 20,200 11,400
49...................................... 20,700 11,700
50...................................... 21,200 12,000
51...................................... 21,700 12,200
52...................................... 22,400 12,500
53...................................... 22,900 12,800
54...................................... 23,600 13,200
55...................................... 24,100 13,500
56...................................... 24,800 13,800
57...................................... 25,600 14,100
58...................................... 26,200 14,500
59...................................... 26,900 14,900
60...................................... 27,700 15,200
[[Page 52421]]
61...................................... 28,500 15,600
62...................................... 29,300 16,000
63...................................... 30,100 16,400
64...................................... 31,100 16,900
65 or older............................. 31,900 17,300
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Independent Students With Dependents Other Than a Spouse
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And they are
If the age of the student is -------------------------------
Married Single
-Then the education savings and
asset protection allowance is
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25 or less.............................. 0 0
26...................................... 1,100 600
27...................................... 2,200 1,300
28...................................... 3,400 1,900
29...................................... 4,500 2,600
30...................................... 5,600 3,200
31...................................... 6,700 3,800
32...................................... 7,800 4,500
33...................................... 9,000 5,100
34...................................... 10,100 5,800
35...................................... 11,200 6,400
36...................................... 12,300 7,000
37...................................... 13,400 7,700
38...................................... 14,600 8,300
39...................................... 15,700 9,000
40...................................... 16,800 9,600
41...................................... 17,100 9,800
42...................................... 17,500 10,000
43...................................... 17,900 10,200
44...................................... 18,400 10,500
45...................................... 18,800 10,700
46...................................... 19,300 10,900
47...................................... 19,800 11,200
48...................................... 20,200 11,400
49...................................... 20,700 11,700
50...................................... 21,200 12,000
51...................................... 21,700 12,200
52...................................... 22,400 12,500
53...................................... 22,900 12,800
54...................................... 23,600 13,200
55...................................... 24,100 13,500
56...................................... 24,800 13,800
57...................................... 25,600 14,100
58...................................... 26,200 14,500
59...................................... 26,900 14,900
60...................................... 27,700 15,200
61...................................... 28,500 15,600
62...................................... 29,300 16,000
63...................................... 30,100 16,400
64...................................... 31,100 16,900
65 or older............................. 31,900 17,300
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Independent Students Without Dependents Other Than a Spouse
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And they are
If the age of the student is -------------------------------
Married Single
-Then the education savings and
asset protection allowance is
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25 or less.............................. 0 0
[[Page 52422]]
26...................................... 1,100 600
27...................................... 2,200 1,300
28...................................... 3,400 1,900
29...................................... 4,500 2,600
30...................................... 5,600 3,200
31...................................... 6,700 3,800
32...................................... 7,800 4,500
33...................................... 9,000 5,100
34...................................... 10,100 5,800
35...................................... 11,200 6,400
36...................................... 12,300 7,000
37...................................... 13,400 7,700
38...................................... 14,600 8,300
39...................................... 15,700 9,000
40...................................... 16,800 9,600
41...................................... 17,100 9,800
42...................................... 17,500 10,000
43...................................... 17,900 10,200
44...................................... 18,400 10,500
45...................................... 18,800 10,700
46...................................... 19,300 10,900
47...................................... 19,800 11,200
48...................................... 20,200 11,400
49...................................... 20,700 11,700
50...................................... 21,200 12,000
51...................................... 21,700 12,200
52...................................... 22,400 12,500
53...................................... 22,900 12,800
54...................................... 23,600 13,200
55...................................... 24,100 13,500
56...................................... 24,800 13,800
57...................................... 25,600 14,100
58...................................... 26,200 14,500
59...................................... 26,900 14,900
60...................................... 27,700 15,200
61...................................... 28,500 15,600
62...................................... 29,300 16,000
63...................................... 30,100 16,400
64...................................... 31,100 16,900
65 or older............................. 31,900 17,300
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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 from family financial resources toward educational
expenses. 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:
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If AAI is Then the contribution is
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Less than -$3,409.......................... -$750
-$3,409 to $16,000......................... 22% of AAI.
$16,001 to $20,100......................... $3,520 + 25% of AAI over $16,000.
$20,101 to $24,200......................... $4,545 + 29% of AAI over $20,100.
$24,201 to $28,300......................... $5,734 + 34% of AAI over $24,200.
$28,301 to $32,300......................... $7,128 + 40% of AAI over $28,300.
$32,301 or more............................ $8,728 + 47% of AAI over $32,300.
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The contribution for an independent student with dependents other
than a spouse is computed according to the following schedule:
[[Page 52423]]
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If AAI is Then the Contribution is
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Less than -$3,409.......................... -$750
-$3,409 to $16,000......................... 22% of AAI
$16,001 to $20,100......................... $3,520 + 25% of AAI over $16,000
$20,101 to $24,200......................... $4,545 + 29% of AAI over $20,100
$24,201 to $28,300......................... $5,734 + 34% of AAI over $24,200
$28,301 to $32,300......................... $7,128 + 40% of AAI over $28,300
$32,301 or more............................ $8,728 + 47% of AAI over $32,300
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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 on the marginal differences in costs for a two-worker family
compared to a one-worker family. The items covered by these additional
expenses are: 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 $4,000 or 35 percent of earned income.
6. Allowance for State and Other Taxes. The allowance for State and
other taxes protects a portion of parents' and students' incomes 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.
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Parents of dependents and Dependents and
independents with dependents independents
other than a spouse without
-------------------------------- dependents
State Percent of Total Income other than a
-------------------------------- spouse
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Under $15,000 $15,000 & Up All (%)
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Alabama......................................................... 3 2 2
Alaska.......................................................... 2 1 0
Arizona......................................................... 4 3 2
Arkansas........................................................ 4 3 3
California...................................................... 8 7 6
Colorado........................................................ 4 3 3
Connecticut..................................................... 9 8 5
Delaware........................................................ 5 4 3
District of Columbia............................................ 8 7 6
Florida......................................................... 3 2 1
Georgia......................................................... 5 4 3
Hawaii.......................................................... 5 4 4
Idaho........................................................... 5 4 3
Illinois........................................................ 6 5 3
Indiana......................................................... 4 3 3
Iowa............................................................ 5 4 3
Kansas.......................................................... 4 3 3
Kentucky........................................................ 5 4 4
Louisiana....................................................... 3 2 2
Maine........................................................... 6 5 4
Maryland........................................................ 8 7 6
Massachusetts................................................... 7 6 4
Michigan........................................................ 5 4 3
Minnesota....................................................... 6 5 5
Mississippi..................................................... 3 2 2
Missouri........................................................ 5 4 3
Montana......................................................... 5 4 3
Nebraska........................................................ 5 4 3
Nevada.......................................................... 2 1 1
New Hampshire................................................... 5 4 1
New Jersey...................................................... 9 8 5
New Mexico...................................................... 3 2 2
New York........................................................ 10 9 7
North Carolina.................................................. 5 4 4
North Dakota.................................................... 2 1 1
Ohio............................................................ 5 4 3
Oklahoma........................................................ 3 2 2
[[Page 52424]]
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 3
Vermont......................................................... 6 5 3
Virginia........................................................ 6 5 4
Washington...................................................... 3 2 1
West Virginia................................................... 3 2 2
Wisconsin....................................................... 7 6 4
Wyoming......................................................... 2 1 1
Other........................................................... 2 1 1
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Accessible Format: Individuals with disabilities can obtain this
document in an accessible format (e.g., braille, large print,
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under FOR FURTHER INFORMATION CONTACT in this notice.
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Program Authority: 20 U.S.C. 1087rr.
Dated: August 3, 2016.
James W. Runcie,
Chief Operating Officer Federal Student Aid.
[FR Doc. 2016-18723 Filed 8-5-16; 8:45 am]
BILLING CODE 4000-01-P