[Federal Register Volume 65, Number 104 (Tuesday, May 30, 2000)]
[Notices]
[Pages 34454-34458]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-13399]


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DEPARTMENT OF EDUCATION


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

AGENCY: Office of Student Financial Assistance, Department of 
Education.

ACTION: Notice of revision of the Federal need analysis methodology for 
the 2001-2002 award year.

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

SUMMARY: The Secretary of Education 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 2001-2002 under part F of title IV of the Higher 
Education Act (HEA) of 1965, as amended (Title IV, HEA Programs). 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, HEA Programs include the Federal Pell Grant, campus-based (Federal 
Perkins Loan, Federal Work-Study, and Federal Supplemental Educational 
Opportunity Grant Programs), Federal Family Education Loan, and William 
D. Ford Federal Direct Loan Programs.

FOR FURTHER INFORMATION CONTACT: Ms. Edith Bell, Program Specialist, 
U.S. Department of Education, 400 Maryland Avenue, SW., (Room 4621, 
ROB-3), Washington, DC 20202-5444.

[[Page 34455]]

Telephone: (202) 708-5591. If you use a telecommunications device for 
the deaf (TDD), you may call the Federal Information Relay Service 
(FIRS) at 1-800-877-8339.
    Individuals with disabilities may obtain this document in an 
alternate format (e.g., Braille, large print, audiotape or computer 
diskette) on request to the contact person listed in the preceding 
paragraph.

SUPPLEMENTARY INFORMATION: Part F of title IV of the HEA specifies the 
criteria, data elements, calculations, and tables used in the Federal 
Need Analysis Methodology EFC calculations.
    Section 478 of part F of the HEA requires the Secretary to adjust 
four of the tables--the Income Protection Allowance, the Adjusted Net 
Worth of a Business or Farm, the Education Savings and Asset Protection 
Allowance, and the Assessment Schedules and Rates--each award year to 
take into account inflation. The changes are based, in general, upon 
increases in the Consumer Price Index.
    For the award year 2001-2002 the Secretary is charged with updating 
the income protection allowance, adjusted net worth of a business or 
farm, and the assessment schedules and rates to account for inflation 
that took place between December 1999 and December 2000. However, since 
the Secretary must publish these tables before December 2000, the 
increases in the tables must be based upon a percentage equal to the 
estimated percentage increase in the Consumer Price Index for all Urban 
Consumers for 1999. The Secretary estimates that the increase in the 
Consumer Price Index for all Urban Consumers for the period December 
1999 through December 2000 will be 2.3 percent. The updated tables are 
in sections 1, 2, and 4 of this notice.
    The Secretary must also revise, for each award year, the table on 
asset protection allowance as provided for in section 478(d) of the 
HEA. The Education Savings and Asset Protection Allowance table for the 
award year 2001-2002 has been updated in section 3 of this notice.
    Section 477(b)(5) of part F of the HEA also requires the Secretary 
to increase the amount specified for the Employment Expense Allowance 
to account for inflation based upon increases in the Bureau of Labor 
Statistics budget of the marginal costs for a two-earner compared to a 
one-earner family for meals away from home, apparel and upkeep, 
transportation, and housekeeping services. Therefore, the Secretary is 
increasing this allowance as described in section 5 of this notice.
    The HEA provides for the following annual updates:
    1. Income Protection Allowance. This allowance is the amount of 
reasonable living expenses that would be associated with the 
maintenance of an individual or family. The allowance is offset against 
the family's income and varies by family size. The income protection 
allowance for the dependent student is $2,250. The income protection 
allowances for parents of dependent students and independent students 
with dependents other than a spouse for award year 2001-2002 are:

----------------------------------------------------------------------------------------------------------------
                                                                        Number in college
                  Family size                   ----------------------------------------------------------------
                                                      1            2            3            4            5
----------------------------------------------------------------------------------------------------------------
2..............................................       12,760       10,580
3..............................................       15,890       13,720       11,540
4..............................................       19,630       17,440       15,270       13,090
5..............................................       23,160       20,970       18,800       16,620       14,450
6..............................................       27,090       24,900       22,730       20,550      18,380
----------------------------------------------------------------------------------------------------------------
For each additional family member add $3,060.
For each additional college student subtract $2,170.

    The income protection allowances for independent students without 
dependents other than a spouse for award year 2001-2002 are:

------------------------------------------------------------------------
                                                 Number in
                Marital status                    college
------------------------------------------------------------------------
Single........................................            1       $5,110
Married.......................................            2        5,110
Married.......................................            1        8,180
------------------------------------------------------------------------

    2. Adjusted Net Worth (NW) of a Business or Farm. A portion of the 
full net value of a farm or business is excluded from the calculation 
of an expected contribution since--(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--                        The adjusted net worth is--
                                              ------------------------------------------------------------------
    Less than $1.............................          0
    $1 to $90,000............................          0   +     40%  of NW..........................
    $90,001 to $275,000......................     36,000   +     50%  of NW over.....................    $90,000
    $275,001 to $455,000.....................    128,500   +     60%  of NW over.....................    275,000
    $455,001 or more.........................    236,500   +    100%  of NW over.....................    455,000
----------------------------------------------------------------------------------------------------------------


[[Page 34456]]

    3. Education Savings and Asset Protection Allowance. This allowance 
protects a portion of net worth (assets less debts) from being 
considered available for postsecondary educational expenses. There are 
three asset protection allowance tables--one for parents of dependent 
students, one for independent students without dependents other than a 
spouse, and one for independent students with dependents other than a 
spouse.

                            Dependent Students
------------------------------------------------------------------------
                                                       And there are--
                                                   ---------------------
        If the age of the older parent is--            Two        One
                                                     parents     parent
------------------------------------------------------------------------
                                                     Then the education
                                                      savings and asset
                                                    protection allowance
                                                            is--
                                                   ---------------------
25 or less........................................          0          0
26................................................      2,500      1,500
27................................................      5,000      2,900
28................................................      7,500      4,400
29................................................     10,000      5,800
30................................................     12,500      7,300
31................................................     15,000      8,800
32................................................     17,500     10,200
33................................................     19,900     11,700
34................................................     22,400     13,100
35................................................     24,900     14,600
36................................................     27,400     16,100
37................................................     29,900     17,500
38................................................     32,400     19,000
39................................................     34,900     20,400
40................................................     37,400     21,900
41................................................     38,400     22,300
42................................................     39,300     22,800
43................................................     40,300     23,300
44................................................     41,400     23,800
45................................................     42,400     24,400
46................................................     43,500     24,900
47................................................     44,600     25,500
48................................................     45,700     26,100
49................................................     46,800     26,700
50................................................     48,300     27,200
51................................................     49,500     27,900
52................................................     50,800     28,600
53................................................     52,300     29,400
54................................................     53,600     30,100
55................................................     55,300     30,800
56................................................     56,900     31,500
57................................................     58,700     32,400
58................................................     60,400     33,200
59................................................     62,200     34,200
60................................................     64,100     35,000
61................................................     66,000     36,000
62................................................     68,300     37,000
63................................................     70,600     38,000
64................................................     72,700     39,100
65 and over.......................................     75,100     40,400
------------------------------------------------------------------------


       Independent Students Without Dependents Other Than a Spouse
------------------------------------------------------------------------
                                                    And the student is--
          If the age of the student is--           ---------------------
                                                     Married     Single
------------------------------------------------------------------------
                                                     Then the education
                                                      savings and asset
                                                    protection allowance
                                                            is--
                                                   ---------------------
25 or less........................................          0          0
26................................................      2,500      1,500
27................................................      5,000      2,900
28................................................      7,500      4,400
29................................................     10,000      5,800
30................................................     12,500      7,300
31................................................     15,000      8,800
32................................................     17,500     10,200
33................................................     19,900     11,700
34................................................     22,400     13,100
35................................................     24,900     14,600
36................................................     27,400     16,100
37................................................     29,900     17,500
38................................................     32,400     19,000
39................................................     34,900     20,400
40................................................     37,400     21,900
41................................................     38,400     22,300
42................................................     39,300     22,800
43................................................     40,300     23,300
44................................................     41,400     23,800
45................................................     42,400     24,400
46................................................     43,500     24,900
47................................................     44,600     25,500
48................................................     45,700     26,100
49................................................     46,800     26,700
50................................................     48,300     27,200
51................................................     49,500     27,900
52................................................     50,800     28,600
53................................................     52,300     29,400
54................................................     53,600     30,100
55................................................     55,300     30,800
56................................................     56,900     31,500
57................................................     58,700     32,400
58................................................     60,400     33,200
59................................................     62,200     34,200
60................................................     64,100     35,000
61................................................     66,000     36,000
62................................................     68,300     37,000
63................................................     70,600     38,000
64................................................     72,700     39,100
65 and over.......................................     75,100     40,400
------------------------------------------------------------------------


        Independent Students With Dependents Other Than a Spouse
------------------------------------------------------------------------
                                                    And the student is--
          If the age of the student is--           ---------------------
                                                     Married     Single
------------------------------------------------------------------------
                                                     Then the education
                                                     savings and assets
                                                    protection allowance
                                                            is--
                                                   ---------------------
25 or less........................................          0          0
26................................................      2,500      1,500
27................................................      5,000      2,900
28................................................      7,500      4,400
29................................................     10,000      5,800
30................................................     12,500      7,300
31................................................     15,000      8,800
32................................................     17,500     10,200
33................................................     19,900     11,700
34................................................     22,400     13,100
35................................................     24,900     14,600
36................................................     27,400     16,100
37................................................     29,900     17,500
38................................................     32,400     19,000
39................................................     34,900     20,400
40................................................     37,400     21,900
41................................................     38,400     22,300
42................................................     39,300     22,800
43................................................     40,300     23,300
44................................................     41,400     23,800
45................................................     42,400     24,400
46................................................     43,500     24,900
47................................................     44,600     25,500
48................................................     45,700     26,100
49................................................     46,800     26,700
50................................................     48,300     27,200
51................................................     49,500     27,900
52................................................     50,800     28,600
53................................................     52,300     29,400
54................................................     53,600     30,100
55................................................     55,300     30,800
56................................................     56,900     31,500
57................................................     58,700     32,400
58................................................     60,400     33,200
59................................................     62,200     34,200
60................................................     64,100     35,000
61................................................     66,000     36,000
62................................................     68,300     37,000
63................................................     70,600     38,000
64................................................    72,700,     39,100
65 and over.......................................     75,100     40,400
------------------------------------------------------------------------

    4. Assessment Schedules and Rates. Two schedules, one for dependent 
students and one for independent students with dependents other than a 
spouse, are used to determine the expected contribution toward 
educational expenses from family financial resources. For dependent 
students, the expected parental contribution is derived from an 
assessment of the parents adjusted available income (AAI). For 
independent students with dependents other than a spouse, the expected 
contribution 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 ($3,409)...............      -$750
    ($3,409) to $11,400......................              +     22%  of AAI.........................

[[Page 34457]]

 
    $11,401 to $14,300.......................      2,508   +     25%  of AAI over....................    $11,400
    $14,301 to $17,200.......................      3,233   +     29%  of AAI over....................     14,300
    $17,201 to $20,100.......................      4,074   +     34%  of AAI over....................     17,200
    $20,101 to $23,000.......................      5,060   +     40%  of AAI over....................     20,100
    $23,001 or more..........................      6,220   +     47%  of AAI over....................     23,000
----------------------------------------------------------------------------------------------------------------

    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 ($3,409).............      -$750
    ($3,409) to $11,400....................             ......     22%  of AAI.......................
    $11,401 to $14,300.....................      2,508       +     25%  of AAI over..................    $11,400
    $14,301 to $17,200.....................      3,233       +     29%  of AAI over..................     14,300
    $17,201 to $20,100.....................      4,074       +     34%  of AAI over..................     17,200
    $20,101 to $23,000.....................      5,060       +     40%  of AAI over..................     20,100
    $23,001 or more........................      6,220       +     47%  of AAI over..................     23,000
----------------------------------------------------------------------------------------------------------------

    5. Employment Expense Allowance. This allowance for employment-
related expenses, which is used for the parents of dependent students 
and for married independent students with dependents, recognizes 
additional expenses incurred by working spouses and single-parent 
households. The allowance is based upon the marginal differences in 
costs for a two wage earner family compared to a one wage earner family 
for meals away from home, apparel and upkeep, transportation, and 
housekeeping services.
    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 $2,900 or 35 percent of earned income.
    6. Allowance for State and Other Taxes. This allowance for State 
and other taxes protects a portion of the parents' and student's income 
from being considered available for postsecondary educational expenses. 
There are four tables 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.

                      Parents of Dependent Students
------------------------------------------------------------------------
                                                   And parents' total
                                                       income is--
  If parents' State or territory of residence  -------------------------
                      is:                        less than    $15,000 or
                                                  $15,000        more
------------------------------------------------------------------------
                                                then the percentage is--
------------------------------------------------------------------------
Wyoming, Tennessee, Nevada, Alaska, Texas.....            3            2
Louisiana, Florida, Washington, South Dakota..            4            3
Alabama, Mississippi..........................            5            4
North Dakota, Illinois, Connecticut, New                  6            5
 Mexico, Missouri, West Virginia, Arizona,
 Indiana, Oklahoma, Arkansas..................
New Hampshire, Pennsylvania, Colorado,                    7            6
 Georgia, Kansas, Kentucky, Idaho.............
North Carolina, Virginia, Delaware, South                 8            7
 Carolina, Ohio, Utah, Nebraska, Montana,
 California, New Jersey, Iowa, Vermont, Hawaii
Massachusetts, Rhode Island, Michigan,                    9            8
 Minnesota, Maine, Maryland...................
District of Columbia, Wisconsin, Oregon.......           10            9
New York......................................           11           10
Other.........................................            4            3
------------------------------------------------------------------------


        Independent Students With Dependents Other Than a Spouse
------------------------------------------------------------------------
                                                   And student's total
                                                       income is--
 If student's State or territory of residence  -------------------------
                      is:                        Less than    $15,000 or
                                                  $15,000        more
------------------------------------------------------------------------
                                                then the percentage is--
                                               -------------------------
Wyoming, Tennessee, Nevada, Alaska, Texas.....            3            2
Louisiana, Florida, Washington, South Dakota..            4            3
Alabama, Mississippi..........................            5            4
North Dakota, Illinois, Connecticut, New                  6            5
 Mexico, Missouri, West Virginia, Arizona,
 Indiana, Oklahoma, Arkansas..................
New Hampshire, Pennsylvania, Colorado,                    7            6
 Georgia, Kansas, Kentucky, Idaho.............
North Carolina, Virginia, Delaware, South                 8            7
 Carolina, Ohio, Utah, Nebraska, Montana,
 California, New Jersey, Iowa, Vermont, Hawaii
Massachusetts, Rhode Island, Michigan,                    9            8
 Minnesota, Maine, Maryland...................
District of Columbia, Wisconsin, Oregon.......           10            9
New York......................................           11           10

[[Page 34458]]

 
Other.........................................            4            3
------------------------------------------------------------------------


                           Dependent Students
------------------------------------------------------------------------
                                                                 The
     If student's State or territory of residence is:        percentage
                                                                is--
------------------------------------------------------------------------
Alaska, Texas, South Dakota, Wyoming, Washington,                     0
 Tennessee, Nevada........................................
Florida, New Hampshire....................................            1
Connecticut, Louisiana, Illinois, North Dakota............            2
Mississippi, Arizona, Alabama, Pennsylvania, New Jersey,              3
 Missouri.................................................
Nebraska, Indiana, Colorado, New Mexico, Oklahoma, Kansas,            4
 West Virginia, Rhode Island, Virginia, Georgia, Arkansas,
 Vermont, Michigan........................................
Montana, Idaho, Utah, Kentucky, Massachusetts, California,            5
 North Carolina, South Carolina, Ohio, Iowa, Delaware,
 Maine, Wisconsin.........................................
Oregon, Maryland, Minnesota, Hawaii.......................            6
District of Columbia, New York............................            7
Other.....................................................            2
------------------------------------------------------------------------


       Independent Students Without Dependents Other Than a Spouse
------------------------------------------------------------------------
                                                                 The
      If student's State or territory of residence is:        percentage
                                                                 is--
------------------------------------------------------------------------
Alaska, Texas, South Dakota, Wyoming, Washington,                      0
 Tennessee, Nevada.........................................
Florida, New Hampshire.....................................            1
Connecticut, Louisiana, Illinois, North Dakota.............            2
Mississippi, Arizona, Alabama, Pennsylvania, New Jersey,               3
 Missouri..................................................
Nebraska, Indiana, Colorado, New Mexico, Oklahoma, Kansas,             4
 West Virginia, Rhode Island, Virginia, Georgia, Arkansas,
 Vermont, Michigan.........................................
Montana, Idaho, Utah, Kentucky, Massachusetts, California,             5
 North Carolina, South Carolina, Ohio, Iowa, Delaware,
 Maine, Wisconsin..........................................
Oregon, Maryland, Minnesota, Hawaii........................            6
District of Columbia, New York.............................            7
Other......................................................            2
------------------------------------------------------------------------

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Regulations is available on GPO Access at: http://www.access.gpo.gov/nara/index.html

(Catalog of Federal Domestic Assistance Numbers: 84.007 Federal 
Supplemental Educational Opportunity Grant; 84.032 Federal Family 
Education Loan Program; 84.033 Federal Work-Study Program; 84.038 
Federal Perkins Loan Program; 84.063 Federal Pell Grant Program; 
William D. Ford Federal Direct Loan Program, 84.268)


    Dated: May 23, 2000.
Jim Lynch,
Acting Chief Operating Officer, Student Financial Assistance.
[FR Doc. 00-13399 Filed 5-26-00; 8:45 am]
BILLING CODE 4000-01-U