[Federal Register Volume 89, Number 90 (Wednesday, May 8, 2024)]
[Notices]
[Pages 38875-38878]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-09966]


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DEPARTMENT OF EDUCATION


Federal Need Analysis Methodology for the 2024-25 Award Year--
Federal Pell Grant, Federal Work-Study, Federal Supplemental 
Educational Opportunity Grant, William D. Ford Federal Direct Loan, and 
TEACH Grant Programs

AGENCY: Federal Student Aid, Department of Education.

ACTION: Notice.

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SUMMARY: The Secretary announces the annual updates to the tables used 
in the statutory Federal Need Analysis Methodology that determines a 
student's Student Aid Index (SAI) for award year (AY) 2024-25 for 
student financial aid programs, Assistance Listing Numbers (ALN) 
84.063, 84.033, 84.007, 84.268, and 84.379. 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: Heather Hall Lewis. Telephone: (202) 
417-1981. Email: [email protected].
    If you are deaf, hard of hearing, or have a speech disability and 
wish to access telecommunications relay services, please dial 7-1-1.

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 SAI.
    Enacted into law as part of the Consolidated Appropriations Act, 
2021, Division FF, Title VII (116 Pub. L. 260), the FAFSA 
Simplification Act makes many significant changes to the Higher 
Education Act of 1965, as amended (HEA), regarding Federal Need 
Analysis Methodology, including how the Secretary must update the 
tables used in the formula. Due to the magnitude of these (and other) 
changes and to ensure that both the Department and the higher education 
community were prepared to fully implement the FAFSA Simplification 
Act, in June 2021, Federal Student Aid (FSA) announced a phased 
approach to implementation. As part of this approach, in the FAFSA 
Simplification Act Technical Corrections Act, Division R (Pub. L. 117-
103) of the Consolidated Appropriations Act, 2022 (CAA 2022), Congress 
extended the full implementation of the FAFSA Simplification Act until 
the 2024-25 award year.
    Section 478 of the HEA, as amended by the FAFSA Simplification Act, 
requires the Secretary to annually update the following five tables for 
inflation--the Income Protection Allowance (IPA), the Adjusted Net 
Worth (NW) of a Business or Farm, the Asset Protection Allowance, the 
Assessment Schedules and Rates, and the Employment Expense Allowance. 
The updates are based, in general, upon increases in items such as, but 
not limited to, the Consumer Price Index (CPI).
    The Secretary is charged with updating the IPA, adjusted NW of a 
business or farm, the asset protection allowance, the assessment 
schedules

[[Page 38876]]

and rates, and the employment expense allowance to account for 
inflation that took place between April 2020 and April in the year 
prior to the beginning of each award year. The increases in the tables 
must be based on a percentage equal to the percentage increase in the 
Consumer Price Index for All Urban Consumers (CPI-U) for April of the 
applicable year.
    This notice includes the new 2024-25 AY values for the five tables 
listed above, which reflect the FAFSA Simplification Act amendments. 
The updated tables are in sections 1 (Income Protection Allowance), 2 
(Adjusted Net Worth of a Business or Farm), 3 (Asset Protection 
Allowance), 4 (Assessment Schedules and Rates), and 5 (Employment 
Expense Allowance) 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 and marital status. The IPA for dependent 
students is $11,130. The IPAs for parents of dependent students and 
independent students are listed in the tables below.

                      Parents of Dependent Students
------------------------------------------------------------------------
                                                                Income
                        Family size                           protection
                                                              allowance
------------------------------------------------------------------------
2..........................................................      $27,600
3..........................................................       34,350
4..........................................................       42,430
5..........................................................       50,060
6..........................................................       58,560
------------------------------------------------------------------------
              For each additional family member add $6,610.
------------------------------------------------------------------------
------------------------------------------------------------------------


    Married Independent Students With Dependents Other Than a Spouse
------------------------------------------------------------------------
                                                                Income
                        Family size                           protection
                                                              allowance
------------------------------------------------------------------------
3..........................................................      $54,580
4..........................................................       67,400
5..........................................................       79,530
6..........................................................       93,010
------------------------------------------------------------------------
             For each additional family member add $10,510.
------------------------------------------------------------------------
------------------------------------------------------------------------


     Single Independent Students With Dependents Other Than a Spouse
------------------------------------------------------------------------
                                                                Income
                        Family size                           protection
                                                              allowance
------------------------------------------------------------------------
2..........................................................      $51,960
3..........................................................       64,700
4..........................................................       79,880
5..........................................................       94,260
6..........................................................      110,230
------------------------------------------------------------------------
             For each additional family member add $12,460.
------------------------------------------------------------------------
------------------------------------------------------------------------


       Independent Students Without Dependents Other Than a Spouse
------------------------------------------------------------------------
                                                                Income
                       Marital status                         protection
                                                              allowance
------------------------------------------------------------------------
Single.....................................................      $17,310
Married....................................................       27,750
------------------------------------------------------------------------

    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 a SAI 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.

                Adjusted Net Worth of a Business or Farm
------------------------------------------------------------------------
    If the NW of a business or farm is         Then the adjusted NW is
------------------------------------------------------------------------
Less than $1..............................  $0.
$1 to $165,000............................  $0 + 40% of NW.
$165,001 to $490,000......................  $66,000 + 50% of NW over
                                             $165,000.
$490,001 to $820,000......................  $228,500 + 60% of NW over
                                             $490,000.
$820,001 or more..........................  $426,500 + 100% of NW over
                                             $820,000.
------------------------------------------------------------------------

    3. Asset Protection Allowance. This allowance protects a portion of 
NW (assets less debts) from being considered available for 
postsecondary educational expenses. There is one asset protection 
allowance table for parents of dependent students, independent students 
without dependents other than a spouse, and independent students with 
dependents other than a spouse.

   Parents of Dependent Students, Independent Students With Dependents
 Other Than a Spouse, and Independent Students Without Dependents Other
                              Than a Spouse
------------------------------------------------------------------------
                                         And the older parent or the
 If the age of the older parent or         independent student is
    the independent student is     -------------------------------------
                                         Married             Single
------------------------------------------------------------------------
                                    Then the allowance is
                                   -------------------------------------
25 or less........................                  0                  0
26................................                  0                  0
27................................                  0                  0
28................................                  0                  0
29................................                  0                  0
30................................                  0                  0
31................................                  0                  0
32................................                  0                  0
33................................                  0                  0
34................................                  0                  0
35................................                  0                  0

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64................................                  0                  0
65 or older.......................                  0                  0
------------------------------------------------------------------------

    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 SAI from family financial resources toward educational 
expenses. For dependent students, the SAI is derived from an assessment 
of the parents' adjusted available income (AAI). For independent 
students with dependents other than a spouse, the SAI 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 contribution of parents of dependent students, and independent 
students with dependents other than a spouse, is computed according to 
the following schedule:

                     Assessment of Available Income
------------------------------------------------------------------------
               If AAI is                     Then the contribution is
------------------------------------------------------------------------
Less than -$6,820......................  -$1,500,
-$6,820 to $20,600.....................  22% of AAI.
$20,601 to $25,800.....................  $4,532 + 25% of AAI over
                                          $20,600.
$25,801 to $31,000.....................  $5,832 + 29% of AAI over
                                          $25,800.
$31,001 to $36,300.....................  $7,340 + 34% of AAI over
                                          $31,000.
$36,301 to $41,500.....................  $9,142 + 40% of AAI over
                                          $36,300.
$41,501 or more........................  $11,222 + 47% of AAI over
                                          $41,500.
------------------------------------------------------------------------

    5. Employment Expense Allowance. This allowance for employment-
related expenses recognizes additional expenses incurred by working 
individuals. For parents of dependent students, the employment expense 
allowance is the lesser of $4,730 or 35% of the total earned income of 
the student's parent and parent's spouse, if applicable. The employment 
expense allowance for independent students is zero if the student is 
not married (single, separated or divorced/widowed) or the lesser of 
$4,730 or 35% of the combined earned income for the student and student 
spouse if the student is married.
    Accessible Format: On request to the program contact person listed 
under FOR FURTHER INFORMATION CONTACT, individuals with disabilities 
can obtain this document in an accessible format. The Department will 
provide the requestor with an accessible format that may include Rich 
Text Format (RTF) or

[[Page 38878]]

text format (txt), a thumb drive, an MP3 file, braille, large print, 
audiotape, or compact disc, or other accessible format.
    Electronic Access to This Document: The official version of this 
document is the document published in the Federal Register. You may 
access the official edition of the Federal Register and the Code of 
Federal Regulations at www.govinfo.gov. At this site, you can view this 
document, as well as all other documents of this Department published 
in the Federal Register, in text or Portable Document Format (PDF). To 
use PDF, you must have Adobe Acrobat Reader, which is available free at 
this site.
    You may also access documents of the Department published in the 
Federal Register by using the article search feature at 
www.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by the Department.
    Program Authority: 20 U.S.C. 1087 et seq.

Richard Cordray,
Chief Operating Officer, Federal Student Aid.
[FR Doc. 2024-09966 Filed 5-7-24; 8:45 am]
BILLING CODE 4000-01-P