[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.

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

    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
----------------------------------------------------------------------------------------------------------------
                                                                 Number in college
           Family size           -------------------------------------------------------------------------------
                                         1               2               3               4               5
----------------------------------------------------------------------------------------------------------------
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
----------------------------------------------------------------------------------------------------------------

    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
----------------------------------------------------------------------------------------------------------------
                                                                 Number in college
           Family size           -------------------------------------------------------------------------------
                                         1               2               3               4               5
----------------------------------------------------------------------------------------------------------------
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
----------------------------------------------------------------------------------------------------------------

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

    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.

----------------------------------------------------------------------------------------------------------------
     If the NW of a business or farm is                            Then the adjusted NW is
----------------------------------------------------------------------------------------------------------------
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.
----------------------------------------------------------------------------------------------------------------

    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
------------------------------------------------------------------------
                                                   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......................................           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
------------------------------------------------------------------------


        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......................................           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
------------------------------------------------------------------------


       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

[[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
------------------------------------------------------------------------

    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:

----------------------------------------------------------------------------------------------------------------
                 If AAI is                                         Then the contribution is
----------------------------------------------------------------------------------------------------------------
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.
----------------------------------------------------------------------------------------------------------------

    The contribution for an independent student with dependents other 
than a spouse is computed according to the following schedule:

[[Page 52423]]



 
----------------------------------------------------------------------------------------------------------------
                 If AAI is                                         Then the Contribution is
----------------------------------------------------------------------------------------------------------------
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
----------------------------------------------------------------------------------------------------------------

    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.

----------------------------------------------------------------------------------------------------------------
                                                                     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
                                                                                                 ---------------
                                                                   Under $15,000   $15,000 & Up      All  (%)
----------------------------------------------------------------------------------------------------------------
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
----------------------------------------------------------------------------------------------------------------

    Accessible Format: Individuals with disabilities can obtain this 
document in an accessible format (e.g., braille, large print, 
audiotape, or compact disc) on request to the contact person listed 
under FOR FURTHER INFORMATION CONTACT in this notice.
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document is the document published in the Federal Register. Free 
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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